Helped by a stock buyback program. Comerica's battered shares are pulling themselves off the mat.

From a low of $25.25 a share on Nov. 4, the stock price rose as high as $28.625 on Dec. 2 - a 13.3% increase - before dropping back slightly. The shares closed Wednesday at $28, up 12.5 cents. That's about 10 times trailing earnings, which is cheap for the banking group.

Even with the recent gains, Comerica shares are still down 11% on the year, one of the worst performances in the group.

Comerica announced Nov. 10 that it would buy back five million shares, or about 4% of shares outstanding. The repurchase, if completed, will bring back in the number of shares issued for the acquisition of Pacific Western Bancshares, San Jose, Calif., which was announced in September.

Strong Performance

That buyback has helped the shares rebound. So has the bank's strong performance in the past few quarters, despite the fact that it has been slow to cut costs since its 1992 merger with Manufacturers National.

It earned a 1.25% return on assets in the third quarter, for example. And analysts are expecting a better performance next ear as earnings pick up.

"The stock got beat up. but it was still a good fundamental story." said Dennis LaPlante, an analyst at Fox-Pitt Kelton. "The numbers the bank is reporting are still very respectable."

A |Buy' Message

Lump that in with a 4% dividend yield - better than three-year Treasuries - and it spells "buy" to some money managers and analysts.

"Given the current valuation and the fundamental solidness of Comerica, it's of superior value compared to other banks and the broader market," said David Tsiang, an analyst at Ernst & Co.

Investors have pummeled Comerica's shares since early January, when the bank announced that it would not cut costs as quickly as predicted in the Manufacturers National merger.

Slow Consolidation

Comerica's management was slow to consolidate the two banks' computer systems, and it let department managers hire their own consultants and temporary employees to help with the merger.

The cost-cutting announcement sparked an 8% slump in Comerica's stock price in five days, as analysts reduced their ratings and cut their optimistic 1993 and 1994 earnings estimates.

"Part of the problem was that expectations were heightened so much after the merger," said Mr. LaPlante of Fox-Pitt Kelton.

No Dilution in Two Mergers

Because Comerica and Manufacturers National were in-town rivals, the deal wasn't done at a premium, which meant no dilution to either book or per-share earnings. The merger's promise was so great that analysts were predicting a return on assets of 1.5% in 1994.

The company has told analysts that it expects to reach the goal of cutting $145 million in costs. But the bulk of those cuts will take effect next year, said analysts. not in 1993 as originally anticipated.

Already out of favor, Comerica didn't help itself in the eyes of the investment community by announcing the Pacific Western acquisition. Investors complained that a Detroit-based bank muddling through a merger had no business buying a bank suffering under the California recession.

But Comerica will account for the deal under purchase-accounting rules, which means no dilution.

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