Credit Suisse’s Canadian bank analyst James Bantis has chopped his 12-month target price for battered Canadian Imperial Bank of Commerce to $85 from $98 after the bank’s announcement Monday that it is raising $2.75-billion in new equity to bolster capital because of more massive subprime-related losses.
However, Mr. Bantis told clients in a note that he is maintaining his “neutral” rating on the shares because it is getting clobbered in the corners of its home rink.
“While this capital injection should significantly reduce the uncertainty surrounding CIBC’s financial position, we remain concerned that the core operating franchise remains under siege by its competitors,” he said.
As of this morning, the consensus target price for the bank’s shares is $90.04, according to a survey of analysts by Bloomberg, while their recommendations include three “buys,” eight “holds” and two “sells.”
