CIBC: Should You Buy the Post-Earnings Bump?

The Big Six Canadian bank stocks carry a very strong reputation among investors and non-investors alike. Indeed, the Financial space is the largest weighting on the energy and materials-heavy S&P/TSX Composite Index. The S&P/TSX Capped Financials Index slipped marginally on February 27. Today, I want to take a snapshot at Canadian Imperial Bank of Commerce (TSX:CM). This is the first Canadian bank stock to release its first quarter earnings.

CIBC released its first quarter fiscal 2023 earnings on February 24, 2023. The bank reported total revenue of $5.92 billion – up 8% compared to the $5.49 billion it delivered in the first quarter of fiscal 2022. Meanwhile, adjusted net income declined 3% from the previous year to $1.84 billion and adjusted diluted earnings per share (EPS) dropped 5% to $1.94.

Canadian Personal and Business Banking reported adjusted pre-provision and pre-tax earnings of $977 million – down $67 million compared to the previous year. This segment’s revenues were powered by volume growth and lower fee and commission income. Meanwhile, adjusted pre-provision and pre-tax earnings came in at $686 million. That was up $62 million compared to the first quarter of fiscal 2022. CIBC’s United States Commercial Banking and Wealth Management segment also benefited from improved volume growth in a high interest rate environment.

Shares of CIBC currently possess an attractive price-to-earnings ratio of 9.3. Meanwhile, this bank stock offers a quarterly dividend of $0.85 per share. That represents a strong 5.4% yield. This bank stock still looks like a solid buy after its Q1 earnings release.