Comerica (CMA) has been downgraded by UBS analyst Nicholas Holowko from Neutral to Sell, with the price target raised to $64 from $60.

The firm expects pre-provision net revenue to be below Street estimates and highlights the potential for regulatory relief to boost valuations in the mid-cap banking sector.

Holowko believes that the upcoming election will reverse the valuation challenges caused by the regional bank crisis in 2023, underscoring the importance of stock selection for 2025.

UBS recommends focusing on undervalued stocks with significant growth potential, capital optionality, and strategic value.

The firm's outlook includes a forecast for the Fed Funds rate to reach 4% by the end of 2025, with earnings estimates aligning with consensus for the next two years.