Investing.com - BofA Securities raised its price target on Commerce Bancshares (NASDAQ: CBSH ) to $71.00 from $69.00 on Tuesday, while maintaining a Neutral rating on the stock following the bank’s recent acquisition announcement.

The price target adjustment comes after Commerce Bancshares announced on June 16, 2025, that it would acquire FineMark in an all-stock transaction valued at approximately $585 million. BofA Securities views the acquisition as a bolt-on that aligns with Commerce’s growth strategy, particularly in wealth management.

BofA Securities noted that FineMark’s low loan loss profile complements Commerce Bancshares’ business, while the deal’s short earnback period and conservative assumptions make the acquisition attractive. The deal values FineMark at 14.1x 2026 estimated earnings, representing a slight premium compared to similar-sized deals announced within the last five years.

Following the acquisition announcement, BofA Securities raised its 2026 earnings per share estimate for Commerce Bancshares by 5.5% to $4.48 from $4.25. This revision implies the stock is trading at 13.7x 2026 estimated earnings, a 44% premium to mid-cap peers.

The transaction remains subject to regulatory approval and approval of FineMark shareholders, according to BofA Securities. Despite recognizing Commerce Bancshares as a high-quality franchise, the firm maintained its Neutral rating, indicating it sees better risk/reward opportunities elsewhere.

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