CM

We rate CANADIAN IMPERIAL BANK OF COMMERCE /CAN/ (CM) as a Hold with a composite score of 55.8/100 at a current price of $98.13. The stock presents a mixed quantitative picture — neither compelling enough to warrant new accumulation nor weak enough to justify selling for existing holders. Our factors are split, and the overall profile suggests patience is warranted.

The rating is primarily driven by strength in momentum (87th percentile) and stability (83th percentile), which together account for the majority of the composite score. Offsetting weakness in quality (29th percentile) and investment (50th percentile) tempers our overall conviction. We assign a No Moat rating (28/100), Medium uncertainty, and Standard capital allocation.

Key items to watch: balance sheet deleveraging progress; sustainability of the current growth rate. Any material change in these dynamics could warrant a reassessment of our rating. The moat trend is stable, which suggests the competitive landscape is stable for now.

CANADIAN IMPERIAL BANK OF COMMERCE /CAN/ holds a top-quartile position (#0 of 50) within the Finance, Insurance, And Real Estate sector, based on our composite quantitative scoring across quality, value, momentum, and stability factors. The composite score of 55.8/100 places it at rank #1165 in our full 7,333-stock universe. With a $78.1B market capitalization, CANADIAN IMPERIAL BANK OF COMMERCE /CAN/ operates at meaningful scale within the Finance, Insurance, And Real Estate sector, providing competitive advantages in distribution, procurement, and customer reach.

The near-term outlook is constructive, with revenue growing at 23% and momentum in the 87th percentile confirming positive market sentiment and institutional accumulation. The combination of strong top-line growth and favorable price dynamics suggests the company is executing well on its growth strategy. Investment factor at the 50th percentile indicates reinvestment patterns that investors should monitor for sustainability.

The margin cascade tells an important story: gross margins of 61% (-15.8pp vs sector) narrow to operating margins of 39% (+22.3pp vs sector) and net margins of 63.1%, yielding a gross-to-net conversion rate of 104%. This efficient conversion suggests well-controlled operating costs and limited margin leakage between the gross and net levels.

At a current price of $98.13, CANADIAN IMPERIAL BANK OF COMMERCE /CAN/ is trading near fair value based on current fundamentals. Our value factor score of 54/100 reflects a composite assessment across multiple valuation metrics including price-to-earnings, price-to-book, EV/EBITDA, and price-to-sales ratios relative to both sector peers and the broader market. Valuation metrics are mixed, with no strong signal of mispricing in either direction.

The stock currently trades at EV/EBITDA of 4.3x (discounted to peers), P/B of 2.0x, P/S of 2.4x. We evaluate these multiples in the context of both absolute levels and sector-relative positioning to form our valuation view.

We assign a Medium uncertainty rating to CANADIAN IMPERIAL BANK OF COMMERCE /CAN/. The stock presents a balanced risk profile: significant leverage (141% debt-to-equity) and weak quality scores (29th percentile). While not risk-free, the core business fundamentals are adequate to withstand moderate economic stress, and the range of potential outcomes around our fair value estimate is manageable.

Specific risk factors that inform our assessment include: significant leverage (141% debt-to-equity); weak quality scores (29th percentile); low beta of 0.49 — while defensive, this may indicate limited upside participation in bull markets. Each of these factors independently widens the distribution of potential outcomes, and in combination they create a risk profile that demands careful position sizing. The stability factor at the 83th percentile and quality factor at the 29th percentile provide a quantitative summary of the overall risk landscape.

Key risk mitigants include: healthy gross margins of 61% provide a buffer against cost pressures; above-average stability (83th percentile) suggests predictable business dynamics; large-cap scale ($78.1B) provides resilience. These factors partially offset the identified risks and provide downside protection in adverse scenarios. On balance, the risk-reward profile is favorable for long-term investors.

We rate CANADIAN IMPERIAL BANK OF COMMERCE /CAN/'s capital allocation as Standard. Management has shown adequate — though not exceptional — stewardship of shareholder capital. Returns on equity stand at 52.7%, and the balance sheet is managed within acceptable parameters (D/E: 141%). Exemplary allocators typically sustain ROE above 20% and D/E below 50%; CANADIAN IMPERIAL BANK OF COMMERCE /CAN/ falls short on at least one dimension.

There is room for improvement in optimizing the capital structure or enhancing shareholder returns. The 3.32% dividend yield provides some income return, but the overall capital allocation framework would benefit from either higher reinvestment returns, improved balance sheet efficiency, or increased shareholder distributions. We will monitor for signs of strategic improvement that could warrant an upgrade.

In summary, CANADIAN IMPERIAL BANK OF COMMERCE /CAN/ receives a Hold rating with a composite score of 55.8/100 (rank #1165 of 7,333). Our quantitative framework assigns a No Moat (28/100, trend: stable), Medium uncertainty, and Standard capital allocation. The average factor score across quality, value, momentum, stability, and investment is 61/100.

Our analysis supports a neutral stance on CANADIAN IMPERIAL BANK OF COMMERCE /CAN/. While the quantitative profile is not weak enough to warrant selling, it lacks the multi-factor strength required for a buy recommendation. Existing holders should maintain positions and monitor for catalysts — either fundamental improvement or valuation compression — that would shift the risk-reward balance.