Commerce Bancshares (CBSH) Stock Forecast & Price Target

Commerce Bancshares is positioned for continued fundamental improvement as management’s commentary points to further net interest margin expansion, supported by roughly 50% of loans re-pricing higher after Fed hikes, low-beta deposits, and redeployment of $1.1B in near-term cash flows from securities yielding about 3.20%. The company also showed stronger underlying profitability in 2Q26, with core EPS of $1.13 above Street expectations, an 18 bps sequential NIM increase to 3.77%, and higher earning asset yields of 4.87% after securities repositioning lifted yields by 40 bps to 3.37%. Additional upside comes from improving fee momentum in cards and wealth, stable deposit costs, and robust buybacks that should return 50% or more of net income to shareholders.

Commerce Bancshares is facing a challenging setup because operating expense growth is expected to run near the high end of the 3%-4% range, with limited cost savings from the delayed FineMark systems conversion and 4Q expenses still expected to stay around $282M-$284M. Although 2Q26 core EPS of $1.13 beat estimates on stronger revenue, a lower provision, and larger buybacks, the company still expects EPS growth to lag peers, with flattish growth in 2026 and only mid- to high-single-digit growth in 2027 versus peers above 10%. Its valuation also looks demanding at 13.1x 2027E EPS, a 22% premium to peers, while loan and deposit growth remain stuck in the low-single-digit range, limiting operating leverage and upside.