Why Comerica Stock Slumped Amid Revenue Miss and Macro Concerns

Comerica (CMA) shares fell sharply on April 22, 2025, dropping 4.34% in early trading despite reporting a modest beat on earnings per share (EPS). The decline underscores how investors often prioritize top-line growth and macroeconomic signals over bottom-line results—a dynamic that weighed heavily on the Texas-headquartered bank’s valuation. Let’s unpack the key drivers behind the sell-off.

Revenue Miss Overshadows EPS Beat

While Comerica reported Q1 2025 EPS of $1.25, slightly above analysts’ $1.16 estimate, the $2.13 million revenue shortfall to $829 million immediately raised red flags. Investors typically reward consistent revenue growth, and the flat net interest income ($575 million, unchanged from Q4 2024) signaled stagnation in core lending and deposit activities. The disconnect between the beat and the miss highlights a growing focus on top-line metrics in a sector where margins are under pressure from competitive pricing and economic uncertainty.

Deposits Decline Signals Liquidity Challenges

Average deposits dropped by $1.4 billion sequentially, with management citing seasonal outflows and a strategic reduction in high-cost brokered deposits. While this move could improve long-term profitability, the immediate drop in deposits—critical for funding loans—sparked concerns about customer retention and liquidity. Analysts noted that non-interest-bearing deposits, which carry lower costs, grew only modestly, raising questions about the sustainability of Comerica’s cost management.

Guidance Highlights Macro Risks and Loan Growth Stagnation

Comerica’s executives painted a cautious outlook, projecting a 1-2% decline in average loan growth for 2025 due to “customer hesitancy” amid broader economic uncertainty. The bank’s forward guidance also included a 5-7% net interest income rise for the year, tempered by a 2-3% increase in non-interest expenses. These figures, paired with management’s acknowledgment of a potential 1-2% GDP contraction in 2025, amplified fears that the bank’s revenue trajectory could remain sluggish for months.

Why the Market Reacted So Sharply

The sell-off reflects broader investor skepticism toward financial institutions navigating a fragile economy. Even though Comerica maintained its dividend (yielding 5.36%) and boasts a strong CET1 capital ratio of 12.05%, the market prioritized near-term risks over stability. The stock’s P/E ratio of 10.09x suggests undervaluation, but investors are pricing in the likelihood of slower loan growth and deposit management challenges.

Conclusion: A Cautionary Tale for Financials in a Weak Macro Environment

Comerica’s stumble underscores the precarious position of regional banks in an uncertain economy. While its balance sheet remains robust, the combination of a revenue miss, deposit erosion, and cautious guidance has eroded investor confidence. The 4.34% drop on April 22 reflects a market increasingly focused on macroeconomic headwinds rather than individual bank performance. For Comerica to regain momentum, it will need to demonstrate stronger loan growth, stabilize deposits, and navigate competitive pressures—all while the broader economy avoids a sharper slowdown. Until then, the stock’s valuation may remain under pressure, even with a dividend yield that ranks among the highest in its peer group.

In short, Comerica’s decline is a microcosm of the challenges facing banks in 2025: growth is hard to come by, and the market is quick to penalize any sign of hesitation.