Commerce Bancshares (CBSH) Stock Forecast & Price Target

Commerce Bancshares is supported by improving core earning power, as 2Q26 core EPS of $1.13 exceeded expectations and core fees of $181.3 million and core expenses of $281.1 million were both in line, while net interest margin expanded 18 bps to 3.77%. Its late-2Q securities repositioning, including the sale of the entire TIPS portfolio and a roughly $0.9 billion AFS shift into higher-yielding assets, should help stabilize and lift core NII, with management also expecting stable deposit costs and meaningful core margin expansion in 3Q. Credit quality remains pristine with NCOs of 19 bps and NPLs at just 0.06% of loans, and strong buyback activity plus healthy fee momentum and wealth management growth further reinforce the positive fundamental outlook.

Commerce Bancshares is likely to face muted fundamental momentum because loan and deposit growth are expected to remain in the low single digits, with average loans rising only 3.5% ann. versus forecast 3% and average deposits declining 2.0% ann. even as period-end deposits fell 7% ann. The company’s performance is also vulnerable to net interest margin pressure, slower fee income growth, and rising credit costs if economic conditions weaken, especially given the stated risk of materially higher net charge-offs and softer lending demand. In addition, regulatory, liquidity, and competitive pressures could constrain capital deployment and limit upside from its Commercial, Retail Banking, and Wealth segments.