Why Don't More Analysts Think Commerce Bancshares (CBSH) Is a Buy?

Commerce Bancshares may be undervalued with poor growth indicators, but the 6 analysts following the company give it an rating of hold. Their target prices range from $50.0 to $69.0 per share, for an average of $60.67. At today's price of $54.28, Commerce Bancshares is trading -10.53% away from its average target price, suggesting there is an analyst consensus of some upside potential for the stock.

Commerce Bancshares, Inc. operates as the bank holding company for Commerce Bank that provides retail, mortgage banking, corporate, investment, trust, and asset management products and services to individuals and businesses in the United States. Based in Kansas City, MO, the mid-cap Finance company has 4,447 full time employees. Commerce Bancshares has provided a 1.8% dividend yield over the last 12 months.

Commerce Bancshares has a trailing twelve month P/E ratio of 14.1, compared to an average of 14.34 for the Finance sector. Based on its EPS guidance of 3.74, the company has a forward P/E ratio of 14.5.

The average compound growth rate of the company's historical and projected earnings per share is 4.9%. On this basis, the company's PEG ratio is 3.29, which suggests that it is overpriced.

Commerce Bancshares is also overpriced compared to its book value, since its P/B ratio of 2.8 is higher than the sector average of 1.57. The company's shares are currently 39.5% above their Graham number, which suggests that they are not trading at a fair value in terms of earnings and net assets.

2019-12-31 2020-12-31 2021-12-31 2022-12-31
Revenue (MM) $1,350 $1,347 $1,426 $1,509
Revenue Growth n/a -0.21% 5.88% 5.85%
Net Margins 31.21% 26.29% 37.22% 32.36%
Net Margins Growth n/a -15.76% 41.57% -13.06%
Earnings Per Share $3.09 $2.64 $4.11 $3.85
EPS Growth n/a -14.56% 55.68% -6.33%
Diluted Shares (MM) 133 129 128 125
Free Cash Flow (MM) $470 $591 $541 $494
FCF Growth n/a 25.66% -8.44% -8.65%
Capital Expenditures (MM) -$43 -$33 -$57 -$65
LT Debt to Equity 0.0 0.0 0.0 0.0
The above analysis is intended for educational purposes only and was performed on the basis of publicly available data. It is not to be construed as a recommendation to buy or sell any security. Any buy, sell, or other recommendations mentioned in the article are direct quotations of consensus recommendations from the analysts covering the stock, and do not represent the opinions of Market Inference or its writers. Past performance, accounting data, and inferences about market position and corporate valuation are not reliable indicators of future price movements. Market Inference does not provide financial advice. Investors should conduct their own review and analysis of any company of interest before making an investment decision.