Thoughts on CM

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CM has had a decent run-up recently. Over valued at this level?
Thanks

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Asked on May 20, 2025 10:10 am
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I would argue that yes, it is slightly overvalued at this point in time. Trading at a high single digit premium to historical averages.

The company's runup over the last few years was primarily following a large drawdown in price due to escalating provisions. It looks like the company may have been a bit too cautious in the reporting of their provisions and as a result they were able to reduce them dramatically over the last few years which ultimately fueled earnings growth.

I am not a huge fan of CIBC. Don't get me wrong, it is an outstanding company. I am just not a huge fan of them in relation to the other banks. I do believe banks like Royal and National are higher quality and more diverse. A little too much exposure to the Canadian housing market for CM for me to ever consider taking a position.

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Posted by Dan Kent
Answered on May 21, 2025 7:45 am