Intrinsic value of Comerica - CMA

Previous Close

$90.70

  Intrinsic Value

$32.38

stock screener

  Rating & Target

str. sell

-64%

Previous close

$90.70

 
Intrinsic value

$32.38

 
Up/down potential

-64%

 
Rating

str. sell

Our model is not good at valuating stocks of financial companies, such as CMA.

We calculate the intrinsic value of CMA stock by summing up the current values of future distributable cash flows generated by the company and dividing the sum by the number of outstanding shares. As such, the intrinsic value calculation depends entirely on projections. The more accurate your projections of the company's performance are - the more reliable is the intrinsic value calculation result. Please make sure to check the stock valuation input data below and adjust it if necessary. The quality of the output (intrinsic valuation result) is only as good as the quality of the input. See also DISCLAIMERS.

STOCK VALUATION INPUT DATA

Revenue (in 2017), $M
Initial revenue growth rate, %
Terminal revenue growth rate, %
Revenue decline factor
Initial discount rate, %
Discount rate multiplier
Variable cost ratio, %
Fixed operating expenses, $M
Interest rate on debt, %
Effective corporate tax rate, %
Production assets / Revenue, %
Life of production assets, yrs
Working capital / Revenue, %
Revenue / Adjusted assets
Adjusted equity ratio
Cash flow adjustment, % of Revenue
Book value of equity, $M
Shares outstanding, mln
Market capitalization, $bln 15.8

 

FINANCIAL STATEMENTS FORECAST and PRESENT VALUE CALCULATION

Fiscal year
   2018
   2019
   2020
   2021
   2022
   2023
   2024
   2025
   2026
   2027
   2028
   2029
   2030
   2031
   2032
   2033
   2034
   2035
   2036
   2037
   2038
   2039
   2040
   2041
   2042
   2043
   2044
   2045
   2046
   2047

INCOME STATEMENT

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Revenue growth rate, %
  19.00
  17.60
  16.34
  15.21
  14.19
  13.27
  12.44
  11.70
  11.03
  10.42
  9.88
  9.39
  8.95
  8.56
  8.20
  7.88
  7.59
  7.33
  7.10
  6.89
  6.70
  6.53
  6.38
  6.24
  6.12
  6.01
  5.90
  5.81
  5.73
  5.66
Revenue, $m
  3,682
  4,330
  5,037
  5,803
  6,627
  7,506
  8,439
  9,427
  10,466
  11,557
  12,699
  13,892
  15,136
  16,431
  17,779
  19,180
  20,637
  22,150
  23,723
  25,358
  27,058
  28,825
  30,664
  32,578
  34,570
  36,646
  38,810
  41,066
  43,421
  45,878
Variable operating expenses, $m
  2,732
  3,213
  3,738
  4,306
  4,917
  5,569
  6,262
  6,994
  7,766
  8,575
  9,423
  10,308
  11,231
  12,192
  13,192
  14,232
  15,313
  16,436
  17,603
  18,816
  20,077
  21,388
  22,753
  24,173
  25,651
  27,191
  28,797
  30,471
  32,218
  34,041
Fixed operating expenses, $m
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Total operating expenses, $m
  2,732
  3,213
  3,738
  4,306
  4,917
  5,569
  6,262
  6,994
  7,766
  8,575
  9,423
  10,308
  11,231
  12,192
  13,192
  14,232
  15,313
  16,436
  17,603
  18,816
  20,077
  21,388
  22,753
  24,173
  25,651
  27,191
  28,797
  30,471
  32,218
  34,041
Operating income, $m
  950
  1,117
  1,300
  1,497
  1,710
  1,936
  2,177
  2,432
  2,700
  2,982
  3,276
  3,584
  3,905
  4,239
  4,587
  4,949
  5,324
  5,715
  6,121
  6,542
  6,981
  7,437
  7,911
  8,405
  8,919
  9,455
  10,013
  10,595
  11,203
  11,837
EBITDA, $m
  9,550
  11,231
  13,066
  15,053
  17,189
  19,469
  21,891
  24,451
  27,148
  29,977
  32,940
  36,034
  39,260
  42,620
  46,116
  49,752
  53,530
  57,456
  61,536
  65,777
  70,185
  74,770
  79,539
  84,503
  89,672
  95,057
  100,669
  106,522
  112,629
  119,003
Interest expense (income), $m
  111
  3,305
  3,531
  4,125
  4,774
  5,476
  6,231
  7,037
  7,893
  8,798
  9,751
  10,752
  11,799
  12,893
  14,033
  15,221
  16,457
  17,742
  19,078
  20,466
  21,908
  23,407
  24,966
  26,587
  28,273
  30,027
  31,855
  33,758
  35,742
  37,811
  39,970
Earnings before tax, $m
  -2,356
  -2,413
  -2,825
  -3,276
  -3,766
  -4,294
  -4,860
  -5,461
  -6,098
  -6,770
  -7,475
  -8,215
  -8,988
  -9,794
  -10,634
  -11,509
  -12,418
  -13,363
  -14,345
  -15,366
  -16,426
  -17,529
  -18,675
  -19,868
  -21,108
  -22,400
  -23,745
  -25,147
  -26,609
  -28,134
Tax expense, $m
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Net income, $m
  -2,356
  -2,413
  -2,825
  -3,276
  -3,766
  -4,294
  -4,860
  -5,461
  -6,098
  -6,770
  -7,475
  -8,215
  -8,988
  -9,794
  -10,634
  -11,509
  -12,418
  -13,363
  -14,345
  -15,366
  -16,426
  -17,529
  -18,675
  -19,868
  -21,108
  -22,400
  -23,745
  -25,147
  -26,609
  -28,134

BALANCE SHEET

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Cash and short-term investments, $m
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Total assets, $m
  69,469
  81,696
  95,045
  109,497
  125,030
  141,617
  159,235
  177,859
  197,471
  218,055
  239,602
  262,109
  285,578
  310,019
  335,450
  361,891
  389,374
  417,934
  447,613
  478,459
  510,525
  543,872
  578,564
  614,671
  652,269
  691,438
  732,264
  774,839
  819,258
  865,623
Adjusted assets (=assets-cash), $m
  69,469
  81,696
  95,045
  109,497
  125,030
  141,617
  159,235
  177,859
  197,471
  218,055
  239,602
  262,109
  285,578
  310,019
  335,450
  361,891
  389,374
  417,934
  447,613
  478,459
  510,525
  543,872
  578,564
  614,671
  652,269
  691,438
  732,264
  774,839
  819,258
  865,623
Revenue / Adjusted assets
  0.053
  0.053
  0.053
  0.053
  0.053
  0.053
  0.053
  0.053
  0.053
  0.053
  0.053
  0.053
  0.053
  0.053
  0.053
  0.053
  0.053
  0.053
  0.053
  0.053
  0.053
  0.053
  0.053
  0.053
  0.053
  0.053
  0.053
  0.053
  0.053
  0.053
Average production assets, $m
  86,005
  101,141
  117,668
  135,560
  154,790
  175,326
  197,137
  220,194
  244,474
  269,958
  296,634
  324,498
  353,553
  383,812
  415,296
  448,031
  482,056
  517,414
  554,157
  592,345
  632,044
  673,328
  716,278
  760,979
  807,526
  856,019
  906,563
  959,271
  1,014,263
  1,071,665
Working capital, $m
  -75,688
  -89,009
  -103,553
  -119,299
  -136,223
  -154,295
  -173,490
  -193,781
  -215,149
  -237,575
  -261,051
  -285,573
  -311,143
  -337,773
  -365,479
  -394,288
  -424,231
  -455,348
  -487,684
  -521,291
  -556,228
  -592,560
  -630,358
  -669,697
  -710,661
  -753,336
  -797,817
  -844,203
  -892,599
  -943,115
Total debt, $m
  65,380
  76,384
  88,398
  101,405
  115,385
  130,314
  146,169
  162,931
  180,582
  199,107
  218,500
  238,756
  259,878
  281,875
  304,763
  328,560
  353,295
  378,999
  405,710
  433,471
  462,331
  492,343
  523,566
  556,062
  589,900
  625,152
  661,896
  700,213
  740,190
  781,919
Total liabilities, $m
  62,522
  73,526
  85,540
  98,547
  112,527
  127,456
  143,311
  160,073
  177,724
  196,249
  215,642
  235,898
  257,020
  279,017
  301,905
  325,702
  350,437
  376,141
  402,852
  430,613
  459,473
  489,485
  520,708
  553,204
  587,042
  622,294
  659,038
  697,355
  737,332
  779,061
Total equity, $m
  6,947
  8,170
  9,504
  10,950
  12,503
  14,162
  15,923
  17,786
  19,747
  21,805
  23,960
  26,211
  28,558
  31,002
  33,545
  36,189
  38,937
  41,793
  44,761
  47,846
  51,053
  54,387
  57,856
  61,467
  65,227
  69,144
  73,226
  77,484
  81,926
  86,562
Total liabilities and equity, $m
  69,469
  81,696
  95,044
  109,497
  125,030
  141,618
  159,234
  177,859
  197,471
  218,054
  239,602
  262,109
  285,578
  310,019
  335,450
  361,891
  389,374
  417,934
  447,613
  478,459
  510,526
  543,872
  578,564
  614,671
  652,269
  691,438
  732,264
  774,839
  819,258
  865,623
Debt-to-equity ratio
  9.410
  9.350
  9.300
  9.260
  9.230
  9.200
  9.180
  9.160
  9.140
  9.130
  9.120
  9.110
  9.100
  9.090
  9.090
  9.080
  9.070
  9.070
  9.060
  9.060
  9.060
  9.050
  9.050
  9.050
  9.040
  9.040
  9.040
  9.040
  9.030
  9.030
Adjusted equity ratio
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100

CASH FLOW

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income, $m
  -2,356
  -2,413
  -2,825
  -3,276
  -3,766
  -4,294
  -4,860
  -5,461
  -6,098
  -6,770
  -7,475
  -8,215
  -8,988
  -9,794
  -10,634
  -11,509
  -12,418
  -13,363
  -14,345
  -15,366
  -16,426
  -17,529
  -18,675
  -19,868
  -21,108
  -22,400
  -23,745
  -25,147
  -26,609
  -28,134
Depreciation, amort., depletion, $m
  8,600
  10,114
  11,767
  13,556
  15,479
  17,533
  19,714
  22,019
  24,447
  26,996
  29,663
  32,450
  35,355
  38,381
  41,530
  44,803
  48,206
  51,741
  55,416
  59,234
  63,204
  67,333
  71,628
  76,098
  80,753
  85,602
  90,656
  95,927
  101,426
  107,166
Funds from operations, $m
  6,245
  7,701
  8,942
  10,280
  11,713
  13,238
  14,854
  16,558
  18,349
  20,226
  22,188
  24,235
  26,367
  28,587
  30,895
  33,294
  35,788
  38,378
  41,070
  43,869
  46,778
  49,804
  52,953
  56,230
  59,644
  63,202
  66,911
  70,780
  74,817
  79,033
Change in working capital, $m
  -12,085
  -13,321
  -14,544
  -15,746
  -16,923
  -18,072
  -19,195
  -20,292
  -21,367
  -22,427
  -23,476
  -24,521
  -25,570
  -26,630
  -27,707
  -28,809
  -29,943
  -31,117
  -32,336
  -33,607
  -34,937
  -36,332
  -37,798
  -39,339
  -40,964
  -42,676
  -44,481
  -46,386
  -48,396
  -50,516
Cash from operations, $m
  18,330
  21,022
  23,486
  26,026
  28,636
  31,311
  34,049
  36,850
  39,717
  42,653
  45,664
  48,756
  51,938
  55,217
  58,602
  62,103
  65,731
  69,495
  73,406
  77,476
  81,715
  86,136
  90,750
  95,570
  100,608
  105,878
  111,392
  117,166
  123,213
  129,549
Maintenance CAPEX, $m
  -7,227
  -8,600
  -10,114
  -11,767
  -13,556
  -15,479
  -17,533
  -19,714
  -22,019
  -24,447
  -26,996
  -29,663
  -32,450
  -35,355
  -38,381
  -41,530
  -44,803
  -48,206
  -51,741
  -55,416
  -59,234
  -63,204
  -67,333
  -71,628
  -76,098
  -80,753
  -85,602
  -90,656
  -95,927
  -101,426
New CAPEX, $m
  -13,732
  -15,137
  -16,527
  -17,893
  -19,230
  -20,536
  -21,811
  -23,057
  -24,280
  -25,484
  -26,676
  -27,864
  -29,056
  -30,259
  -31,483
  -32,736
  -34,025
  -35,358
  -36,743
  -38,188
  -39,699
  -41,284
  -42,949
  -44,702
  -46,547
  -48,492
  -50,544
  -52,708
  -54,992
  -57,401
Cash from investing activities, $m
  -20,959
  -23,737
  -26,641
  -29,660
  -32,786
  -36,015
  -39,344
  -42,771
  -46,299
  -49,931
  -53,672
  -57,527
  -61,506
  -65,614
  -69,864
  -74,266
  -78,828
  -83,564
  -88,484
  -93,604
  -98,933
  -104,488
  -110,282
  -116,330
  -122,645
  -129,245
  -136,146
  -143,364
  -150,919
  -158,827
Free cash flow, $m
  -2,630
  -2,715
  -3,155
  -3,633
  -4,150
  -4,704
  -5,295
  -5,921
  -6,583
  -7,278
  -8,008
  -8,771
  -9,568
  -10,398
  -11,263
  -12,162
  -13,097
  -14,069
  -15,078
  -16,128
  -17,219
  -18,353
  -19,532
  -20,759
  -22,037
  -23,367
  -24,754
  -26,199
  -27,706
  -29,279
Issuance/(repayment) of debt, $m
  4,168
  11,004
  12,014
  13,007
  13,979
  14,929
  15,856
  16,762
  17,651
  18,526
  19,392
  20,256
  21,122
  21,997
  22,887
  23,798
  24,735
  25,704
  26,711
  27,761
  28,860
  30,012
  31,223
  32,496
  33,838
  35,252
  36,744
  38,317
  39,977
  41,729
Issuance/(repurchase) of shares, $m
  9,753
  3,636
  4,160
  4,721
  5,319
  5,953
  6,621
  7,324
  8,059
  8,828
  9,630
  10,466
  11,335
  12,238
  13,177
  14,153
  15,166
  16,219
  17,313
  18,450
  19,633
  20,864
  22,144
  23,478
  24,868
  26,317
  27,828
  29,405
  31,051
  32,770
Cash from financing (excl. dividends), $m  
  13,921
  14,640
  16,174
  17,728
  19,298
  20,882
  22,477
  24,086
  25,710
  27,354
  29,022
  30,722
  32,457
  34,235
  36,064
  37,951
  39,901
  41,923
  44,024
  46,211
  48,493
  50,876
  53,367
  55,974
  58,706
  61,569
  64,572
  67,722
  71,028
  74,499
Total cash flow (excl. dividends), $m
  11,292
  11,925
  13,019
  14,095
  15,149
  16,178
  17,182
  18,164
  19,127
  20,076
  21,015
  21,951
  22,889
  23,838
  24,802
  25,789
  26,804
  27,854
  28,946
  30,084
  31,274
  32,523
  33,835
  35,215
  36,669
  38,202
  39,818
  41,523
  43,322
  45,220
Retained Cash Flow (-), $m
  -9,753
  -3,636
  -4,160
  -4,721
  -5,319
  -5,953
  -6,621
  -7,324
  -8,059
  -8,828
  -9,630
  -10,466
  -11,335
  -12,238
  -13,177
  -14,153
  -15,166
  -16,219
  -17,313
  -18,450
  -19,633
  -20,864
  -22,144
  -23,478
  -24,868
  -26,317
  -27,828
  -29,405
  -31,051
  -32,770
Prev. year cash balance distribution, $m
  451
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Cash flow adjustment, $m
  40
  48
  56
  65
  75
  86
  98
  110
  123
  136
  150
  165
  181
  197
  214
  231
  249
  268
  288
  308
  330
  352
  375
  399
  424
  449
  476
  505
  534
  564
Cash available for distribution, $m
  1,989
  8,288
  8,859
  9,374
  9,829
  10,225
  10,561
  10,841
  11,068
  11,247
  11,385
  11,485
  11,555
  11,599
  11,625
  11,636
  11,638
  11,635
  11,633
  11,633
  11,641
  11,659
  11,690
  11,737
  11,801
  11,885
  11,990
  12,118
  12,271
  12,450
Discount rate, %
  15.80
  16.59
  17.42
  18.29
  19.20
  20.17
  21.17
  22.23
  23.34
  24.51
  25.74
  27.02
  28.37
  29.79
  31.28
  32.85
  34.49
  36.21
  38.02
  39.93
  41.92
  44.02
  46.22
  48.53
  50.96
  53.50
  56.18
  58.99
  61.94
  65.03
PV of cash for distribution, $m
  1,718
  6,097
  5,472
  4,788
  4,084
  3,396
  2,753
  2,176
  1,675
  1,256
  917
  651
  449
  301
  196
  124
  76
  45
  25
  14
  7
  4
  2
  1
  0
  0
  0
  0
  0
  0
Current shareholders' claim on cash, %
  50.0
  32.8
  21.7
  14.5
  9.8
  6.6
  4.5
  3.1
  2.1
  1.5
  1.0
  0.7
  0.5
  0.3
  0.2
  0.2
  0.1
  0.1
  0.1
  0.0
  0.0
  0.0
  0.0
  0.0
  0.0
  0.0
  0.0
  0.0
  0.0
  0.0

Comerica Incorporated is a financial services company. The Company's principal activity is lending to and accepting deposits from businesses and individuals. The Company's segments include the Business Bank, the Retail Bank, Wealth Management, Finance and Other. The Business Bank serves middle market businesses, multinational corporations and governmental entities by offering various products and services, including commercial loans and lines of credit, deposits, cash management, capital market products, international trade finance, letters of credit, foreign exchange management services and loan syndication services. The Retail Bank includes small business banking and personal financial services, consisting of consumer lending, consumer deposit gathering and mortgage loan origination. The Wealth Management segment offers products and services consisting of fiduciary services, private banking, retirement services, investment advisory services, investment banking and brokerage services.

FINANCIAL RATIOS  of  Comerica (CMA)

Valuation Ratios
P/E Ratio 33.3
Price to Sales 0
Price to Book 2
Price to Tangible Book
Price to Cash Flow 32.3
Price to Free Cash Flow 40
Growth Rates
Sales Growth Rate -100%
Sales - 3 Yr. Growth Rate %
EPS Growth Rate %
EPS - 3 Yr. Growth Rate %
Capital Spending Gr. Rate -20.2%
Cap. Spend. - 3 Yr. Gr. Rate -1.4%
Financial Strength
Quick Ratio NaN
Current Ratio NaN
LT Debt to Equity 66.5%
Total Debt to Equity 66.5%
Interest Coverage 7
Management Effectiveness
Return On Assets 0.8%
Ret/ On Assets - 3 Yr. Avg. 0.9%
Return On Total Capital 4%
Ret/ On T. Cap. - 3 Yr. Avg. 4.9%
Return On Equity 6.2%
Return On Equity - 3 Yr. Avg. 7.1%
Asset Turnover 0
Profitability Ratios
Gross Margin 0%
Gross Margin - 3 Yr. Avg. 0%
EBITDA Margin 0%
EBITDA Margin - 3 Yr. Avg. 0%
Operating Margin 0%
Oper. Margin - 3 Yr. Avg. 0%
Pre-Tax Margin 0%
Pre-Tax Margin - 3 Yr. Avg. 0%
Net Profit Margin 0%
Net Profit Margin - 3 Yr. Avg. 0%
Effective Tax Rate 28.8%
Eff/ Tax Rate - 3 Yr. Avg. 30.4%
Payout Ratio 31.9%

CMA stock valuation input parameters

Revenue. Company's revenue (or sales) is always the starting point of any cash flow forecast. In the CMA stock intrinsic value calculation we used $3094 million for the last fiscal year's total revenue generated by Comerica. The default revenue input number comes from 2017 income statement of Comerica. You may change it if you feel that it should be adjusted for some unusual circumstances that are not expected to be repeated in the future or if you already know (from interim financial statements, for example) that this year's revenue is going to be quite different.

Revenue growth rate. Forecasted future revenue growth rate is the most important input parameter for the intrinsic value calculation. Unlike other input parameters that are reasonably expected to be in line with their historic averages or their historic trends, the revenue growth rate by and large is a wild card: nobody really knows what the company's revenue will be in the future. Of course, the level of unpredictability is different for different industries (utility companies being the most predictable and, thus, less risky).
    We use three input parameters to forecast the revenue growth rate in our CMA stock valuation model: a) initial revenue growth rate of 19% whose default value is the revenue growth rate in the most recent quarter compared to the quarterly revenue a year ago; b) terminal revenue growth rate of 5% whose default value is chosen to be close to the average nominal (i.e. not adjusted for inflation) GDP growth rate; and c) revenue decline factor of 0.9, which stipulates that revenue growth rate in each forecasted year will be equal to the difference of the revenue growth rate in the preceding year and the terminal revenue growth rate multiplied by this revenue decline factor (with the passage of time the revenue growth rate will be approaching the terminal revenue growth rate, but not quite reaching it - though the difference could be infinitesimally small).
    At the revenue decline factor of 1, the future revenue growth rate is forecasted to be constant and equal to the initial revenue growth rate. The smaller the revenue decline factor, the faster the revenue growth rate will approach the terminal revenue growth.

Discount rate. The discount rate is used for determining the present value of future cash flows: future cash flows are "discounted" as at normal conditions (that translate into positive expected return on investment) one dollar today is worth more than the same dollar in the future. Unlike all other valuation models, we use variable discount rate, i.e. it increases for each consecutive year. This is done to account for higher risk of cash flows coming in further in the future.
    The initial discount rate of 15.8%, whose default value for CMA is calculated based on our internal credit rating of Comerica, is applied to the cash flow expected to be received a year from now (well, actually, to be precise, in the financial year following the base year - the last year for which we have financial statements). For each consecutive year the discount rate is multiplied by the discount rate multiplier of 1.05, e.i. each year it increases by 5%. Feel free to change this number to correspond to your level of risk assessment of Comerica.
    By the way, it is easy to set the discount rate to be constant (this would make comparison with other valuation models easier): just set the discount rate multiplier equal to 1 and chose the magnitude of the initial discount rate to your liking.

Variable cost ratio is the ratio of variable costs (i.e. costs that fluctuate with fluctuation of the volume of production) to the revenue expressed as a percentage. In the calculation of intrinsic value of CMA stock the variable cost ratio is equal to 74.2%.

Fixed operating expenses is just that - expenses that are not dependant on the volume of production. They are set to $0 million in the base year in the intrinsic value calculation for CMA stock. These expenses increase with the level of inflation in subsequent years.

Interest rate on debt is the average all-in rate of interest paid by the company on its debt. It is set at 5.4% for Comerica.

Corporate tax rate of 27% is the nominal tax rate for Comerica. In reality, companies find ways to pay much less taxes than that or not to pay them at all.

Cash flow adjustment could be used for any adjustment the investor deems necessary. Most commonly we use this field to account for stock options-related effects in excess of what is reported on the company's income statement. The cash flow adjustment is expressed as a percentage of the revenue, and in the current valuation of the CMA stock is equal to 1.3%.

Production assets are the company's assets used for manufacturing products or provision of services. In the valuation model input table they are expressed as a percentage of revenue and for CMA are equal to 2335.9%.

Life of production assets of 10 years is the average useful life of capital assets used in Comerica operations. It is used to calculate yearly capital expenditures needed to keep these assets in good order - we call it the maintenance CAPEX.

Working capital is the difference between the company's current assets and liabilities. In the model we use the ratio of working capital to revenue, which for CMA is equal to -2055.7%. A negative number means that the company is apt at using financial resources of its suppliers and customers; a large positive number, on the other hand, means that it either provides in-kind financing to others or is not good at managing its inventories.

Book value of equity - $0 million for Comerica - is used in calculation of the "floor" for intrinsic valuation based on the discounted cash flow (DCF) method. Even if the prospects are very bad for a company, its assets could always be sold now for their current fair market value.

Shares outstanding of 174 million for Comerica is needed to calculate the intrinsic value of one share.

Market capitalization is used here only for reference purposes and as a quick check that the share price and the number of shares outstanding numbers are correct - something especially to be cognizant about at stock splits. So, the market capitalization of Comerica at the current share price and the inputted number of shares is $15.8 billion.

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COMPANY NEWS

▶ Company News For Jul 18, 2018   [Jul-18-18 09:56AM  Zacks]
▶ Comerica Bank execs: Mid-sized business clients worried about tariffs   [12:53PM  American City Business Journals]
▶ Earnings Outlook For Comerica   [Jul-16-18 05:25PM  Benzinga]
▶ Final trades: Comerica, IBM, CBOE, and Groupon   [Jul-09-18 01:36PM  CNBC Videos]
▶ Comerica Bank's Michigan Index Up Again   [Jun-28-18 02:42PM  PR Newswire]
▶ Comerica Bank's Texas Index Rebounds   [02:35PM  PR Newswire]
▶ Comerica Bank's California Index Declines   [02:30PM  PR Newswire]
▶ 5 Cheap Large Cap Stocks to Buy Now   [11:10AM  InvestorPlace]
▶ 5 Cheap Large Cap Stocks to Buy Now   [Jun-27-18 06:34PM  Zacks]
▶ 3 Bank Stocks to Buy After the Feds Stress Tests   [Jun-22-18 10:45AM  InvestorPlace]
▶ Comerica Bank Announces Prime Rate Increase   [Jun-13-18 04:28PM  PR Newswire]
▶ Comerica Bank's Michigan Index Improves   [10:29AM  PR Newswire]
▶ Comerica Bank's Texas Index Ticks Down   [10:28AM  PR Newswire]
▶ Bank Bill to Bring More Competition, M&A   [May-28-18 07:00AM  Morningstar]
▶ Comerica Bank's California Index Levels Out   [Apr-27-18 11:00AM  PR Newswire]
▶ Comerica Bank's Michigan Index Flat   [09:15AM  PR Newswire]
▶ Comerica Bank's Texas Index Steady   [09:00AM  PR Newswire]
▶ Comerica boosts dividend by 13%   [Apr-24-18 02:49PM  MarketWatch]
▶ Company News For Apr 18, 2018   [Apr-18-18 10:19AM  Zacks]
▶ UnitedHealth and Alphabet climb; Tesla and Comerica skid   [Apr-17-18 04:47PM  Associated Press]
▶ Buy Tech, Financial Stocks for Late Bull Market: BofA   [Apr-10-18 08:00AM  Investopedia]
▶ Benzinga's Top Analyst Calls From April 9, 2018   [Apr-09-18 03:51PM  Benzinga]
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