Is CIBC Still a Bargain After a 37.8% Surge and Housing Market News in 2025?

• Wondering if Canadian Imperial Bank of Commerce is fairly priced, overvalued, or an opportunity waiting to be seized? You are not alone. We are about to break down the numbers to see where value lies and what might come next for this iconic Canadian stock.
• In the past year, the stock has surged 37.8%, with an impressive 28.5% return year-to-date, hinting at renewed investor optimism and changing perceptions of risk.
• Recent news of government initiatives to bolster the Canadian housing market, along with industry-wide shifts in lending practices, have moved the spotlight to major banks like CIBC. Regulatory changes and ongoing discussions around interest rates are also influencing investor sentiment and shaping price movements.
• CIBC's current valuation score stands at 3 out of 6, based on our checklist of undervaluation signals. Next, we will dig into what this means using popular valuation frameworks. Stay tuned to discover an even better way to look at value at the end of the article.

Canadian Imperial Bank of Commerce delivered 37.8% returns over the last year. See how this stacks up to the rest of the Banks industry.

Approach 1: Canadian Imperial Bank of Commerce Excess Returns Analysis

The Excess Returns valuation model focuses on evaluating how much value Canadian Imperial Bank of Commerce generates for shareholders above the company's cost of equity. In simple terms, it assesses whether the bank's investments are delivering a higher return than what it costs to raise capital. This method is particularly insightful for financial institutions like CIBC, where consistent profitability and return on equity matter more than just reported earnings.

For CIBC, the average return on equity stands at an impressive 14.39%, underpinned by a stable book value per share of CA$67.46 and a projected stable earnings per share of CA$9.71. This is based on future return estimates from 10 analysts, which provides a high degree of confidence in the reliability of these numbers. The cost of equity is estimated at CA$4.91 per share, resulting in an annual excess return of CA$4.80 per share. These figures signal that CIBC continues to deliver meaningful shareholder value year after year.

Based on this analysis, the intrinsic value for CIBC is CA$169.82 per share. With the stock currently trading at a 31.6% discount to this intrinsic value, the model suggests CIBC is significantly undervalued by the market.

Result: UNDERVALUED

Our Excess Returns analysis suggests Canadian Imperial Bank of Commerce is undervalued by 31.6%. Track this in your watchlist or portfolio, or discover 833 more undervalued stocks based on cash flows.

Head to the Valuation section of our Company Report for more details on how we arrive at this Fair Value for Canadian Imperial Bank of Commerce.

Approach 2: Canadian Imperial Bank of Commerce Price vs Earnings

The Price-to-Earnings (PE) ratio is widely regarded as a suitable valuation metric for profitable companies like Canadian Imperial Bank of Commerce, as it measures how much investors are willing to pay for each dollar of earnings. This multiple is especially helpful for established businesses with consistent profits, offering insight into how the market values their future earning power.

"Normal" or "fair" PE ratios are not set in stone and are typically influenced by expectations of future earnings growth, perceived risk, and the stability of profits. Higher growth and lower risk often justify higher PE ratios, while lower growth or higher uncertainty can lead to lower multiples.

Currently, CIBC trades at a PE ratio of 13.8x. To put this in perspective, this is slightly below the average for Canadian bank peers at 14.6x and above the industry average of 10.1x. However, rather than just comparing to benchmarks, we consider the "Fair Ratio", a proprietary metric from Simply Wall St that weighs not only industry trends and peer data, but also CIBC’s earnings growth, profit margins, market cap, and company-specific risks.

CIBC’s Fair PE Ratio is calculated at 13.4x, reflecting its growth prospects and risk factors more accurately than a generic industry or peer comparison. Since CIBC’s actual PE is nearly identical to its Fair Ratio, the stock appears to be trading at a price that aligns well with its fundamentals and risk profile.

Result: ABOUT RIGHT

PE ratios tell one story, but what if the real opportunity lies elsewhere? Discover 1411 companies where insiders are betting big on explosive growth.

Upgrade Your Decision Making: Choose your Canadian Imperial Bank of Commerce Narrative

Earlier we mentioned that there is an even better way to understand valuation, so let us introduce you to Narratives. A Narrative is simply the story behind a company, combining your view of its future prospects with financial estimates like revenue, earnings, and margins to arrive at a fair value. Narratives connect the dots between what is happening in the business and your own forecast, helping you bridge the gap between company news, financial performance, and whether an investment is worth making.

Narratives on Simply Wall St's Community page make this process intuitive and accessible to everyone. Millions of investors use Narratives to easily compare their fair value with the current market price and make smarter buy or sell decisions. These Narratives update dynamically as new financials or company news emerge, ensuring your perspective always reflects the latest realities.

For example, with Canadian Imperial Bank of Commerce, one investor might build a bullish Narrative, such as expecting revenue growth to outpace peers due to digital adoption and raising their fair value to CA$118 per share. Another investor might be more cautious, highlighting mortgage risk and lower growth, and settling on a fair value closer to CA$78 per share. Narratives empower you to make the story and the numbers your own.

Do you think there's more to the story for Canadian Imperial Bank of Commerce? Head over to our Community to see what others are saying!

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.

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