Scotiabank analyst warns of downside risk for bank stocks, RBC Capital Markets analyst publishes top picks in Canadian real estate, and Goldman Sachs strategist recaps major hedge fund positioning.

Scotiabank analyst Mike Rizvanovic warns of downside risk for domestic bank stocks, citing stretched valuation multiples and potential for interest rates to fall. He is most optimistic about Canadian Imperial Bank of Commerce and National Bank of Canada, while being cautious on Bank of Montreal. RBC Capital Markets analyst Pammi Bir published top picks in Canadian real estate, including Chartwell, First Capital, and Granite, citing strong earnings growth and good value. Goldman Sachs strategist Ben Snider recapped major hedge fund positioning, noting that popular long positions have supported returns despite a challenging market.

Canadian Imperial Bank of Commerce (CIBC) has been quietly gaining traction, sparking interest among investors despite the absence of major announcements. The stock has shown a steady upward trend this month, with a 46% total return over the past year and a 9% climb in the last three months. This momentum follows consistent revenue and net income growth, indicating a measured progress rather than dramatic swings.

CIBC's valuation has been a topic of debate. Some analysts see it as significantly undervalued, with a current price well below the fair value estimated by using a 7.2% discount rate. This valuation thesis is based on higher-value clients, digital expansion, and margin transformation [1]. However, others argue that the stock is trading above the industry average, suggesting caution from the market [2].

The recent increase in CIBC's stock price has been attributed to a 22.5% stake increase by Northwest & Ethical Investments L.P., which bought an additional 37,529 shares, bringing their total to 204,355 shares valued at approximately $11.5 million [3]. This move was accompanied by a quarterly dividend increase to $0.7024, representing a 3.8% yield.

Analysts from RBC Capital Markets have highlighted CIBC as one of their top picks among domestic bank stocks, despite warnings of downside risk from other analysts. Mike Rizvanovic of Scotiabank cited stretched valuation multiples and potential interest rate falls as concerns for domestic bank stocks. However, he remained optimistic about CIBC and National Bank of Canada, while expressing caution on Bank of Montreal [4].

Goldman Sachs strategist Ben Snider noted that popular long positions have supported returns despite a challenging market. This sentiment is reflected in the recent institutional investments in CIBC, with Northwest & Ethical Investments L.P. and Vanguard Group Inc. increasing their stakes [3].

In conclusion, CIBC's steady climb and positive analyst ratings suggest that the bank is well-positioned despite market uncertainties. However, investors should remain vigilant about potential risks such as increased credit provisions and macroeconomic uncertainty.

References:
[1] https://finance.yahoo.com/news/cibc-tsx-cm-valuation-assessing-101638934.html
[2] https://www.ainvest.com/news/canadian-solar-earnings-outlook-eps-estimate-0-98-shares-1-23-52-week-period-analysts-favor-outperform-rating-2508/
[3] https://www.marketbeat.com/instant-alerts/filing-northwest-ethical-investments-lp-buys-37529-shares-of-canadian-imperial-bank-of-commerce-nysecm-2025-08-17/
[4] https://finance.yahoo.com/quote/CM.TO/