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1. Company Snapshot

1.a. Company Description

Canadian Imperial Bank of Commerce, a diversified financial institution, provides various financial products and services to personal, business, public sector, and institutional clients in Canada, the United States, and internationally.The company operates through four strategic business units: Canadian Personal and Business Banking; Canadian Commercial Banking and Wealth Management; U.S. Commercial Banking and Wealth Management; and Capital Markets.The company offers chequing, savings, and business accounts; mortgages; loans, lines of credit, student lines of credit, and business and agriculture loans; investment and insurance services; and credit cards, as well as overdraft protection services.


It also provides day-to-day banking, borrowing and credit, specialty, investing and wealth, and international services; correspondent banking and online foreign exchange services; and cash management services.Canadian Imperial Bank of Commerce was founded in 1867 and is headquartered in Toronto, Canada.

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1.b. Last Insights on CM

The recent performance of Canadian Imperial Bank of Commerce (CM) has been negatively driven by heightened implied volatility in the options market, as investors have become increasingly cautious. This surge in volatility may indicate growing concerns about future earnings prospects, despite the company's strong Q1 2025 earnings beat, which saw revenue rise 17% and adjusted EPS increase 22%. Elevated expenses and trade tensions may be contributing to these concerns, and investors should closely monitor these factors in the coming months."

1.c. Company Highlights

2. CIBC's Q3 2025 Earnings: A Strong Quarter with Continued Outperformance

CIBC reported a strong Q3 2025 with net income of $2.1 billion, up 11% from last year, and earnings per share (EPS) of $2.16, up 12%. The actual EPS came in at $2.15, beating estimates of $2. The bank's revenue performance was robust, driven by its diversified platform and strong client focus. The net interest margin (NIM) is expected to continue trending higher, driven by the bank's focus on relationship-based banking and increasing margins on individual products.

Publication Date: Aug -29

📋 Highlights
  • Net Income & EPS Growth:: Q3 2025 net income rose 11% to $2.1B, with EPS climbing 12% to $2.16.
  • CET1 Ratio & Share Repurchases:: Ended at 13.4% CET1 ratio and repurchased 5.5M common shares, with plans for a 2% NCIB.
  • ROE Improvement:: Return on equity reached 14.2% (up 20 bps YoY), marking 5th consecutive quarterly gain.
  • U.S. Capital Markets Momentum:: Revenue in U.S. operations grew 37% year-to-date, driven by strong performance.
  • Canadian Commercial Banking Growth:: Loans +10% (43% from new clients), deposits +8%, bolstered by relationship banking strategy.

Financial Performance Highlights

The bank's credit performance remains strong, with low loan losses and a stable net write-off ratio. The 90-plus day delinquency rates for credit cards and personal lending portfolios are trending lower, while mortgages are up moderately. The bank's personal banking book is performing well, and they are confident in its resilience. The return on equity (ROE) was 14.2%, up 20 basis points from last year, marking the 5th consecutive quarter of year-over-year ROE improvement.

Valuation Metrics

Using the current price, the bank trades at a P/TBV ratio of approximately 1.62, which is slightly above its historical average. The dividend yield is 3.59%, indicating an attractive income stream for investors. With an ROE of 14.2%, the bank is demonstrating strong profitability. Analysts estimate next year's revenue growth at 2.7%, which is relatively modest. Considering the bank's strong performance and guidance, the current valuation appears reasonable.

Business Segment Highlights

In Canadian Commercial Banking, loan and deposit growth were strong in Q3, up 10% and 8%, respectively. Over 43% of the growth came from new clients, and the strategy of prioritizing relationship banking continues to drive momentum. In Wealth Management, Imperial Service is a core driver of the Mass Affluent strategy, with a focus on relationship banking, technology investments, and growing the adviser base.

Outlook and Guidance

The bank expects declining interest rates to support economic growth, and they're well-positioned to capture emerging opportunities through their diversified platform. The bank is optimistic about its margin guidance, driven by factors such as deposit mix, competitive dynamics, and the execution of their strategy. The impaired provisions guidance remains unchanged, indicating a stable credit environment.

3. NewsRoom

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Canadian Imperial Bank of Commerce (CM) Q4 2025 Earnings Call Highlights: Strong Revenue Growth ...

Dec -05

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Is CIBC (TSX:CM) Now Overvalued? Revisiting the Bank’s Valuation After Its Recent Share Price Surge

Dec -04

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TSX Closer: Sets Fresh Record Close On Improved Commodity Prices and Optimism Around Economy

Dec -04

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Netflix in lead for WBD bid, Canadian banks top earnings estimates

Dec -04

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Correction To TSX Closer: Up For the First Time This Week, Back To Near Last Friday's Record Close

Dec -04

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Update: CIBC Turns Negative in Premarket As Investors Digest Q4 Details; Bank Also Announced Senior Executive Leadership Changes

Dec -04

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Canadian Imperial Bank (CM) Beats Q4 Earnings and Revenue Estimates

Dec -04

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CIBC announces Senior Executive Leadership Changes

Dec -04

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4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (5.09%)

6. Segments

Canadian Personal and Business Banking

Expected Growth: 4.5%

The 4.5% growth in Canadian Personal and Business Banking at CIBC is driven by strong performance in mortgage lending, increased business deposits, and higher fee-based revenue from products like credit cards and investments. Digital transformation and enhanced customer experience have also contributed to the growth, attracting and retaining customers.

Canadian Commercial Banking and Wealth Management

Expected Growth: 5.2%

Canadian Commercial Banking and Wealth Management at CIBC grew 5.2% driven by strong loan growth, increased fee-based revenue, and higher investment assets. Business expansion, digital transformation, and enhanced customer experience also contributed to this growth. Additionally, strategic investments in technology and talent acquisition helped improve operational efficiency and competitiveness.

U.S. Commercial Banking and Wealth Management

Expected Growth: 5.5%

The 5.5% growth in U.S. Commercial Banking and Wealth Management at Canadian Imperial Bank of Commerce is driven by strong loan growth, increased client acquisition, and higher asset under management fees. The segment's performance is also supported by the bank's strategic investments in digital platforms and enhanced customer experience, leading to improved operational efficiency and revenue expansion.

Capital Markets

Expected Growth: 6.0%

The 6.0% growth in Capital Markets at Canadian Imperial Bank of Commerce is driven by strong performance in investment banking, robust trading volumes, and increased advisory fees. Improving market conditions and strategic investments in technology and talent have also contributed to this growth, enabling the bank to capitalize on emerging opportunities and expand its market share.

Corporate and Other

Expected Growth: 3.8%

The 3.8% growth in Corporate and Other segment of Canadian Imperial Bank of Commerce is driven by increased commercial lending, higher investment banking fees, and growth in foreign exchange and interest rate products, partially offset by lower loan fees and higher expenses.

7. Detailed Products

Personal Banking

Everyday banking services for individuals, including chequing and savings accounts, credit cards, mortgages, and personal loans

Business Banking

Financial services for small and medium-sized businesses, including cash management, payment processing, and commercial lending

Wealth Management

Investment and wealth management services for individuals and institutions, including brokerage, advisory, and asset management

Capital Markets

Investment banking and capital markets services, including corporate finance, equity and debt capital markets, and mergers and acquisitions

Credit Cards

A range of credit cards offering rewards, cash back, and other benefits

Mortgages

Residential and commercial mortgage products, including fixed and variable rate mortgages

Insurance

Life, health, and business insurance products, including term life, whole life, and disability insurance

8. Canadian Imperial Bank of Commerce's Porter Forces

Forces Ranking

Threat Of Substitutes

The Canadian Imperial Bank of Commerce (CIBC) faces a moderate threat from substitutes, as there are alternative financial institutions and non-bank financial service providers in the market. However, CIBC's strong brand presence and extensive network mitigate this threat.

Bargaining Power Of Customers

CIBC's customers have relatively low bargaining power due to the bank's large customer base and the fact that switching costs are relatively high. Additionally, CIBC's strong customer service and product offerings reduce customer churn.

Bargaining Power Of Suppliers

The bargaining power of suppliers to CIBC is relatively low, as there are many suppliers in the market and the bank has a large and diversified supplier base. Additionally, CIBC's significant market share and influence allow it to negotiate favorable terms with suppliers.

Threat Of New Entrants

The threat of new entrants to the Canadian banking market is relatively low, due to the high barriers to entry, including regulatory requirements and the need for significant capital investment. CIBC's established brand and market presence further reduce this threat.

Intensity Of Rivalry

The Canadian banking market is highly competitive, with five major banks (including CIBC) competing for market share. The intensity of rivalry is high, with banks competing on price, product offerings, and customer service. CIBC must continually invest in its products and services to remain competitive.

9. SWOT Analysis

Strength

Weaknesses

Opportunities

Threats

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

Value
Debt Weight 78.02%
Debt Cost 23.65%
Equity Weight 21.98%
Equity Cost 10.31%
WACC 20.72%
Leverage 354.97%

11. Quality Control: Canadian Imperial Bank of Commerce passed 2 out of 9 key points

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

Stock-Card
CIBC

A-Score: 6.9/10

Value: 5.2

Growth: 5.2

Quality: 5.2

Yield: 8.0

Momentum: 8.0

Volatility: 10.0

1-Year Total Return ->

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Stock-Card
Scotiabank

A-Score: 6.8/10

Value: 5.3

Growth: 4.9

Quality: 4.1

Yield: 9.0

Momentum: 7.5

Volatility: 10.0

1-Year Total Return ->

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Stock-Card
JPMorgan Chase

A-Score: 6.7/10

Value: 5.3

Growth: 5.2

Quality: 6.5

Yield: 5.0

Momentum: 8.5

Volatility: 9.7

1-Year Total Return ->

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Stock-Card
Citigroup

A-Score: 6.2/10

Value: 6.7

Growth: 4.7

Quality: 4.4

Yield: 5.0

Momentum: 8.5

Volatility: 8.0

1-Year Total Return ->

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Stock-Card
Bank of America

A-Score: 6.2/10

Value: 5.6

Growth: 5.3

Quality: 5.0

Yield: 5.0

Momentum: 7.5

Volatility: 8.7

1-Year Total Return ->

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Stock-Card
Wells Fargo

A-Score: 6.1/10

Value: 5.9

Growth: 5.2

Quality: 5.7

Yield: 4.0

Momentum: 8.0

Volatility: 8.0

1-Year Total Return ->

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Peers Metrics

12.e Scoring Insights

12.f DCF BETA

Parameters

Short Term Growth

Short term Time

Long-Term Growth

WACC

Target Price

126.15$

Current Price

126.15$

Potential

-0.00%

Expected Cash-Flows