CIBC (TSX:CM) Stock May Be Undervalued Despite A 245% Run

Canadian Imperial Bank of Commerce has delivered a powerful run for shareholders over the past few years, which puts a sharp spotlight on whether the current share price lines up with the returns it earns on its capital. With fresh earnings news and a stronger profile in lending and fee income, the question is how much of that performance is already reflected in the valuation.

• Over the past 3 years, Canadian Imperial Bank of Commerce has returned 245.0%. This raises the stakes on whether those past gains are backed by sustainably strong returns on the equity base that supports the business.
• Recent results highlighted an adjusted return on equity of 16.8%. This can shape how investors think about the bank's ability to keep turning its capital base into profits without leaning too heavily on new capital or outsized risk.
• What if you looked at Canadian Imperial Bank of Commerce through its earnings instead? See what Canadian Imperial Bank of Commerce's 14.6x P/E says about the price.

The issue now is whether the returns Canadian Imperial Bank of Commerce earns on its capital are strong and consistent enough to justify where the stock trades today.

If you want more context on how Canadian Imperial Bank of Commerce’s capital returns compare with other opportunities, take a look at 9 high quality undervalued stocks.

Does Canadian Imperial Bank of Commerce Look Undervalued on Excess Returns?

The Excess Returns model looks at how effectively Canadian Imperial Bank of Commerce turns its equity base into earnings above the return required by shareholders. It compares the profit generated on each dollar of book value with the estimated cost of that equity.

On this view, Canadian Imperial Bank of Commerce is treated as a bank with a solid capital base and meaningful surplus profitability. Book value is set at CA$72.14 per share, while stable EPS is CA$11.73 per share, based on weighted future Return on Equity estimates from 12 analysts. The implied cost of equity is CA$5.09 per share, and the excess return is CA$6.64 per share, supported by an average Return on Equity of 16.76% and a stable book value assumption of CA$69.96 per share from 8 analyst estimates. Because the Excess Returns projections put Canadian Imperial Bank of Commerce's estimated intrinsic value substantially above the current share price of CA$155.63, the model suggests the market is not paying fully for those returns on capital.

Canadian Imperial Bank of Commerce's strong Q3 2026 report, with 26% adjusted net income growth and a 16.8% adjusted return on equity, helps explain why this excess return profile points to an intrinsic value above where the shares trade today. 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 pick up where the valuation puzzle for Canadian Imperial Bank of Commerce leaves off, by spelling out which paths for future earnings, growth and profitability would need to play out for the shares to be worth materially more or less than the current market price. They sit on Simply Wall St's Community page. Rather than relying on a single model output, each one sets out the assumptions behind its view of fair value so you can compare those expectations with the results as they arrive.

One of the top community narratives on Canadian Imperial Bank of Commerce: 9% 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 and improving net margins…"

Discover why this Narrative puts Canadian Imperial Bank of Commerce at 9% undervalued.

One more check for Canadian Imperial Bank of Commerce beyond the share price

Before you stop at the valuation work, it is worth asking who is steering Canadian Imperial Bank of Commerce and how their pay lines up with the outcomes you care about. 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.

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