Barclays changed its view on Canadian Imperial Bank of Commerce, moving the stock to Overweight from Underweight and lifting the price objective to Cdn$137 from Cdn$126. The broker cited measurable progress on the bank's medium-term metrics and stronger earnings consistency as key drivers of the upgrade.
The bank's stock performance has been notable: shares have returned 62.49% over the last 12 months, including a 34.47% gain in the most recent six months. Barclays highlights that CIBC has registered return on common equity expansion over the past two years, a trend that underpins the analyst firm's improved stance.
Analyst rationale
Analyst Brian Morton attributed Barclays' decision to CIBC's movement toward its medium-term targets, with return on common equity currently at 14% and closing in on the bank's stated 15%-plus objective. The firm pointed to positive operating leverage, benign credit quality and increased capital deployment through share buybacks as evidence of improving franchise fundamentals.
Valuation and capital returns
On a valuation basis, CIBC is trading at just under 13 times consensus earnings for the coming year, which Barclays characterizes as a modest discount relative to the peer group. The firm also noted that the bank has been returning capital to shareholders, supporting the upgraded view.
Data referenced in the note indicates that CIBC has maintained dividend payments for 16 consecutive years and recorded 17.16% dividend growth in the most recent year, underscoring a steady shareholder-return profile.
Outlook
Barclays expects the recent trends to continue, forecasting further expansion in net interest margins and the possibility of additional upside to the bank's 15%-plus medium-term return on equity target, compared with a 14.4% figure cited for 2025. The firm views these dynamics as supportive of the upgraded rating and higher price target.
Market context
The upgrade and target increase come amid a strong share-price run and reflect Barclays' assessment that improved profitability metrics and steady capital returns justify a more favorable stance. Investors evaluating CIBC will note the combination of ROE progression, dividend durability and active buybacks highlighted by the firm.
Summary
Barclays moved CIBC to Overweight and raised its price target to Cdn$137, pointing to ROE improvement toward a 15%-plus medium-term goal, consistent earnings, positive operating leverage, benign credit trends and ongoing capital returns including share repurchases and dividends.