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CIBC (TSX:CM) Stock May Be 30% Undervalued Following Strong Q3 Results

Simply Wall St · 3d ago

Canadian Imperial Bank of Commerce has delivered a powerful share price run in recent years, and that kind of move naturally raises a question for you as an investor. Is the current price of CIBC shares broadly aligned with the returns the bank earns on the capital it puts to work?

  • Over the past 3 years, CIBC has returned 243.2%, which puts a lot of weight on the idea that the bank’s underlying return on capital can sustain that kind of market confidence.
  • Recent profit growth and a maintained dividend point to a business that may support investor expectations for capital efficiency without obviously signalling a need for heavy balance sheet repair or radically higher funding costs.
  • What if you looked at Canadian Imperial Bank of Commerce through its earnings instead? See why Canadian Imperial Bank of Commerce's 15.2x P/E tells a different valuation story.

The issue now is whether the level of returns CIBC earns on its capital is strong and durable enough to justify where the stock trades today.

If you want to pressure test Canadian Imperial Bank of Commerce against similar ideas, a focused stock screen built around 7 high quality undervalued stocks can be a useful next step in your research.

Is Canadian Imperial Bank of Commerce Still Cheap on Excess Returns?

The Excess Returns model looks at how effectively Canadian Imperial Bank of Commerce converts its equity base into earnings above its own cost of capital. On the inputs used here, book value sits at CA$72.14 per share, with a stable EPS estimate of CA$11.62 per share based on analyst expectations for return on equity. The framework assumes a cost of equity of CA$5.01 per share and an excess return of CA$6.61 per share, supported by an average return on equity estimate of 16.62% and a stable book value projection of CA$69.96 per share.

In this model, that combination highlights a bank that is expected to keep earning more on its equity than the return investors are assumed to require. This is a key reason the Excess Returns estimate comes out substantially above the current CA$161.65 share price. Because CIBC’s latest Q3 2026 results showed stronger revenue and net income along with a maintained dividend, the recent news helps explain why the model still sees value headroom despite the share price strength you have already seen. Find out what Canadian Imperial Bank of Commerce could be worth using our Excess Returns estimate.

The Canadian Imperial Bank of Commerce Narrative: What Would Justify Today's Price?

Narratives for Canadian Imperial Bank of Commerce sit on Simply Wall St's Community page and act as the bridge from the valuation puzzle above, spelling out what would need to happen to future growth, profitability and earnings for the shares to be worth materially more or less than today. Each narrative links its number to a clear view on how Canadian Imperial Bank of Commerce's growth, margins and risk profile might change, giving you something concrete to revisit as fresh information comes through.

One of the top community narratives on Canadian Imperial Bank of Commerce: 5% undervalued

"Accelerating digital adoption, highlighted by CIBC's industry-leading digital registration, AI initiatives, and leading customer satisfaction in digital banking, is lowering operational costs…"

Discover why this Narrative puts Canadian Imperial Bank of Commerce at 5% undervalued.

One more factor to weigh before acting on Canadian Imperial Bank of Commerce's valuation

Price, profits and return on equity only tell part of the story, because the people setting priorities inside Canadian Imperial Bank of Commerce and how they are rewarded can tilt long term outcomes for shareholders. See who runs Canadian Imperial Bank of Commerce and how they are paid.

This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.