Goldman Sachs Upgrades Comerica; Lowers Outlook (CMA)

Goldman Sachs announced on Tuesday that it has lifted its rating on Comerica Incorporated (CMA) to “Neutral.”

The firm has upgraded CMA from “Sell” to “Neutral,” and has raised the company’s price target from $38 to $42. This price target suggests a 2% upside from the stock’s current price of $40.83.

An analyst from the firm noted: “The market has shown willingness to price the shares at a premium based on CMA's absolute rate upside, which we do not expect to change much over time.”

“That said, near-term expectations could be at risk given the ~4% decline in loans in 3Q, which if it continues could weigh on its longer-term earnings profile,” the analyst added.

Looking ahead, the firm has lowered its FY2013 earnings estimates from $2.85 to $2.81 per share. FY2014 estimates have been reduced from $2.95 to $2.90 per share and FY2015 estimates of $3.30 per share were maintained.

Comerica shares were mostly flat during pre-market trading Tuesday. The stock is up 35% YTD.

Retirement Assets Continue to Recover: ICI

Investors took advantage of a growing economy and favorable market conditions to add almost a trillion dollars to retirement accounts in the first quarter.

The Investment Company Institute reports in its quarterly roundup that total U.S. retirement assets were $20.8 trillion as of March 31, up 4.6% from $19.9 trillion on Dec. 31. Retirement savings accounted for 36% of all household financial assets in the United States.

Assets in individual retirement accounts totaled $5.7 trillion, an increase of 5.1% from year-end 2012. Defined contribution plan assets rose 5.7% to $5.4 trillion.

Government pension plans—including federal, state and local government plans—held $5.2 trillion in assets as of the end of March, a 5.3% increase from the end of the fourth quarter of 2012. Private-sector defined benefit (DB) plans held $2.7 trillion in assets at the end of the first quarter, and annuity reserves outside of retirement accounts accounted for another $1.9 trillion.

Defined Contribution Plans

Americans held $5.4 trillion in all employer-based DC retirement plans on March 31, of which $3.8 trillion was held in 401(k) plans. Those figures are up from $5.1 trillion and $3.6 trillion, respectively, as of December 31. Mutual funds managed $3.1 trillion of assets held in 401(k), 403(b), and other DC plans at the end of March, up from $2.9 trillion at year-end 2012. Mutual funds managed 57% of DC plan assets at the end of the first quarter.

Individual Retirement Accounts

IRAs held $5.7 trillion in assets, up from $5.4 trillion at the end of 2012. Forty-six percent of IRA assets, or $2.6 trillion, was invested in mutual funds.

Other Developments

Target date mutual fund assets totaled $529 billion, an increase of 10% in the first quarter. Retirement accounts held the bulk of target date mutual fund assets: 91% of target date mutual fund assets were held through DC plans and IRAs.

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Bet on Best Buy as it Hits New High - Analyst Blog

Shares of Best Buy Co., Inc. (BBY) surged to attain a new 52-week high of $30.35 on Jul 9, 2013, before closing at $29.73. Shares of this Zacks Rank #3 (Hold) stock have amassed a year-to-date return of roughly 155.2%.

Based on the current price, this consumer electronic retailer is 12.1% above the Zacks Consensus average analyst price target of $26.53. The company currently trades at a forward P/E of 13.03x, a discount of 5% to the peer group average of 13.72x.

Best Buy is undergoing a turnaround program including a price match policy, multi-channel strategy, multi-year cost reduction program and closure of some big box stores. In the first quarter of fiscal 2014, the company lowered its cost by $175 million, in addition to $150 million reduced in the fourth quarter of fiscal 2013.

Best Buy's online sales performance remains a positive. Domestic online sales jumped 7.1% during the quarter. We believe that the company is leaving no stone unturned in wooing consumers and capturing incremental revenue, as evident from its strategic initiative of opening "Samsung Experience Shops" within its stores.

It also entered into a similar agreement with Microsoft Corp. (MSFT) to roll out "Windows Store" across its 500 outlets in the U.S. with an additional 100 in Canada. For Best Buy, the deal adds more compelling products to its portfolio to better compete against discount giants such as Wal-Mart Stores Inc. (WMT) and online retailers like Amazon.com Inc. (AMZN).

Best Buy also entered into a contract to divest its 50% stake in Best Buy Europe to Carphone Warehouse Group, the joint venture partner in the same. The move would facilitate the company to concentrate more on its U.S. operations. We believe that the step to offload its stake in Best Buy Europe would augment its return on capital employed.

The Road To Creating An IPO

Through an Initial Public Offering, or IPO, a company raises capital by issuing shares of stock, or equity in a public market. Generally, this refers to when a company issues stock for the first time. But as we will see below, there are ways a company can go public more than once. In a recent survey of public companies, The Economist publication described the IPO process as the locomotive of capitalism. This is because throughout history, the IPO has let the investing public own a small share in many companies that have grown large and hugely successful since they first went public.

Issuing shares through an IPO is one of the primary reasons that stock markets exist. It lets the company raise capital for a variety of reasons, such as to grow further, let initial and early-stage investors cash out some of their investment, or create a currency (such as common stock) to acquire rivals, or even sell shares at a later date. The entire process is referred to as the primary market and happens when an investor buys stock directly from the company. A secondary market is more common, and it exists when investors trade among themselves with shares that have already been issued by a firm.

The Process to Taking a Company Public
As you might imagine, the process to get a company through to its IPO takes time, is expensive and must pass many regulatory hurdles. A very important component of going public is opening a firm's books to public scrutiny, as well as the oversight of the Securities & Exchange Commission (SEC). An investment banker, or underwriter, will help a company through this process, and the younger associates at an investment banking firm will bear the brunt of the grunt work. Those associates will spend many sleepless nights preparing a preliminary prospectus for the SEC and investors, which has come to be referred to as a red herring.

Through many revisions and discussions between the company and its bankers, the red herring will eventually become the final prospectus, which is the formal legal document filed with the SEC that lets the IPO process go through. One of the more common prospectus documents is referred to as form S-1, the formal registration statement under the Securities Act of 1933. Other "S" versions exist and refer to different securities acts, such as those related to investment trusts, employee plans or real estate companies. The prospectus may sound dull and can include hundreds of pages of seemingly mundane and redundant information. But it is extremely important for investors to use to understand what the company does, why it is issuing shares through an IPO and what type of ownership structure is being offered.

PwC, a consulting firm, provides a summary of costs that a company can expect to incur to go public. It also illustrates the steps needed to complete an IPO. For starters, the underwriters, which generally include a lead underwriter and multiple other underwriters (also referred to as the sell side firm and the lead "book runner", with "co-managers"), can take a cut of 5% to 7% of the gross IPO proceeds to distribute shares to investors. There will also be legal, accounting, distribution and mailing, and road show expenses that can easily total in the millions of dollars. A road show is just as it sounds, and it occurs when company executives, including the CEO, CFO and investor relations individual (if it already exists) hit the road to build enthusiasm for investing in the IPO and explain their motivations for doing so. A successful road performance can drive demand for the stock and result in more capital raised.

In rarer circumstances a road show can have the opposite effect. Back when Groupon went public, it came under fire from the SEC for an accounting term it referred to as "Adjusted Consolidated Segment Operating Income". The SEC, as well as other investors, questioned the manner in which it adjusted for marketing and advertising expenses, and called into question how fast the company could grow or generate ample profits in the future.

The Role of IPO Underwriters
Returning briefly to the role of the underwriters, there are other terms to be familiar with in the IPO process. Through a greenshoe option, underwriters can have the right to sell additional shares, or an overallotment of shares. This can occur if an IPO ends up having strong demand and lets the bankers make additional profits, which are earned by selling the shares off at a higher price. It can also let the company earn additional capital. A tombstone refers to a summary advertising document that underwriters issue to prospective investors (and sometimes themselves to commemorate that the IPO process has been completed). It basically summarizes a prospectus and briefly introduces a company.

Underwriters also help companies determine price, or how to best balance the supply of shares being offered with investor demand. Of course, most companies will happily increase supply (such as through a greenshoe option) to meet higher demand, but a difficult balance must be reached. A stock exchange, such as the New York Stock Exchange (NYSE), can help the process and indicate what an opening price on the IPO day is likely to be. Market makers and floor brokers help in this process, as does the syndicate of underwriters, to gauge the overall level of investor interest.

Deciding which exchange to use is also of the utmost importance. Most firms would prefer the NYSE or Nasdaq markets given their ability to transact billions of dollars of daily trading activity and a solid guarantee of market liquidity, trading execution and follow-up reporting.

The Process from the Company's Perspective
In addition to the cost considerations, a company must make many changes to survive when public. The prospectus stipulates many of the new financial, regulatory and legal burdens, and PwC estimates that there will be at least $1.5 million in additional ongoing costs to the average firm that goes public. Hiring and paying a board of directors, or at least a higher profile board, can be expensive. Sarbanes Oxley regulation also imposed cumbersome duties on public companies that must still be met by most larger firms. Learning to deal with analysts, holding conference calls and communicating with shareholders may also be a new experience.

Is Buying an IPO a Good Idea?
For investors in general, it pays to be careful when investing in an IPO. Most importantly, the company and underwriters have control over the timing of an IPO and will try to take the firm public under the most opportune circumstances. This could include during a rising or bull market, or after the firm posts very favorable operating results. A higher price is great for the company and bankers, but it can mean the investment potential in the future is less bright. A great strategy to consider may be to buy into an IPO later in the secondary market after the excitement has died down. A stock that falls in value following an IPO could indicate a pricing miscue by the underwriter, or potentially a lower price to invest in a solid company.

An IPO usually refers to selling shares to the public for the first time. But a company can be taken private (such as by a private equity firm) and then be taken public again, which is also an IPO. This has occurred with Burger King several times.

Bottom Line
Since capitalism has existed, investing in public companies has been an engine of capitalism that lets individuals invest in large firms that have created vast wealth for shareholders. The process is complex, and investors need to be aware of IPO timing, but understanding the road to creating an IPO can be lucrative for companies, underwriters and investors alike.

Lululemon: Here's What We Know

Friday capped a difficult week for stocks with another losing day, as the S&P 500 (SNPINDEX: ^GSPC  ) , and the narrower, price-weighted Dow Jones Industrial Average (DJINDICES: ^DJI  ) , lost 0.6% and 0.7%, respectively.

Lululemon laughs it off
The announcement on Monday that Lululemon Athletica's (NASDAQ: LULU  ) CEO Christine Day would be stepping down took the market by surprise -- and not the good kind, as the stock shed nearly a fifth of its value the next day. The stock has yet to recover, and the company is trying to lighten the mood with a facetious CEO job ad/ application on its website (reminiscent of Ben & Jerry's "Yo! I'm Your CEO" essay contest that ran in 1994-1995 simultaneously with their search for a new CEO).

The reasons for Day's departure remain a mystery, but it's unlikely that she was forced out by her board. This looks like a case in which the "personal reasons" that outgoing CEOs mechanically cite in the press release is actually accurate.

The following graph shows the performance of Lululemon's stock (blue line) on a total-return basis, starting on Jul. 1, 2008, the date on which Christine Day assumed the role of CEO. The graph also includes three benchmarks: the S&P 500, the Russell 2000 Growth Index (which tracks small-capitalization growth stocks) and Under Armour, the athletic apparel maker that is arguably Lululemon's closest peer.

LULU Total Return Price data by YCharts

The graph makes it plain that, over this nearly five-year period, Lululemon has absolutely smashed the broad market and small-cap growth stocks, while matching Under Armour's fantastic returns.

Now, Foolish investors know that a five-year period is a significant chunk of time, particularly in a market in which many investors' time horizon does not extend beyond the next couple of quarters. As such, that performance is unlikely to be the product of anything other than outstanding business fundamentals. On that note, it's worth recapping a few of the company's achievements under Day's tenure:

During the five-year period ending on Feb. 3, 2013, average annual return on equity was 34.5%. Better yet, this was achieved without any recourse to leverage -- Lululemon doesn't have a dollar of financial debt on its balance sheet. Over the five-year period ended May 5, 2013, revenues grew at an annualized rate of 36.5%. That's a fantastic number in any environment, but Lululemon did this in a very tough economic climate for retail.

Does this week's share price slump present an opportunity for investors? At nearly 31 times the next 12 months' earnings-per-share estimate, Lululemon's stock remains pricey by conventional standards, and it may be dead money as Wall Street takes a "wait-and-see" approach to the leadership issue. However, Lululemon appears to have carved out a solid franchise in a very competitive area; for investors with a higher-than-average risk tolerance and a multi-year time frame, the current price could ultimately prove to be an attractive entry point.

Lululemon has the potential to grow its sales by 10 times if it can penetrate its other markets like it has in Canada, but the competitive landscape is starting to increase. Can Lululemon fight off larger retailers, and ultimately deliver huge profits for savvy investors? The Motley Fool answers these questions and more in its most in-depth Lululemon research available. Thousands have already claimed their own premium ticker coverage; gain instant access to your own by clicking here now.

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Is Regal Beloit's Cash Machine Empty?

Although business headlines still tout earnings numbers, many investors have moved past net earnings as a measure of a company's economic output. That's because earnings are very often less trustworthy than cash flow, since earnings are more open to manipulation based on dubious judgment calls.

Earnings' unreliability is one of the reasons Foolish investors often flip straight past the income statement to check the cash flow statement. In general, by taking a close look at the cash moving in and out of the business, you can better understand whether the last batch of earnings brought money into the company, or merely disguised a cash gusher with a pretty headline.

Calling all cash flows
When you are trying to buy the market's best stocks, it's worth checking up on your companies' free cash flow once a quarter or so, to see whether it bears any relationship to the net income in the headlines. That's what we do with this series. Today, we're checking in on Regal Beloit (NYSE: RBC  ) , whose recent revenue and earnings are plotted below.

Source: S&P Capital IQ. Data is current as of last fully reported fiscal quarter. Dollar values in millions. FCF = free cash flow. FY = fiscal year. TTM = trailing 12 months.

Over the past 12 months, Regal Beloit generated $257.4 million cash while it booked net income of $196.4 million. That means it turned 8.2% of its revenue into FCF. That sounds OK.

All cash is not equal
Unfortunately, the cash flow statement isn't immune from nonsense, either. That's why it pays to take a close look at the components of cash flow from operations, to make sure that the cash flows are of high quality. What does that mean? To me, it means they need to be real and replicable in the upcoming quarters, rather than being offset by continual cash outflows that don't appear on the income statement (such as major capital expenditures).

For instance, cash flow based on cash net income and adjustments for non-cash income-statement expenses (like depreciation) is generally favorable. An increase in cash flow based on stiffing your suppliers (by increasing accounts payable for the short term) or shortchanging Uncle Sam on taxes will come back to bite investors later. The same goes for decreasing accounts receivable; this is good to see, but it's ordinary in recessionary times, and you can only increase collections so much. Finally, adding stock-based compensation expense back to cash flows is questionable when a company hands out a lot of equity to employees and uses cash in later periods to buy back those shares.

So how does the cash flow at Regal Beloit look? Take a peek at the chart below, which flags questionable cash flow sources with a red bar.

Source: S&P Capital IQ. Data is current as of last fully reported fiscal quarter. Dollar values in millions. TTM = trailing 12 months.

When I say "questionable cash flow sources," I mean items such as changes in taxes payable, tax benefits from stock options, and asset sales, among others. That's not to say that companies booking these as sources of cash flow are weak, or are engaging in any sort of wrongdoing, or that everything that comes up questionable in my graph is automatically bad news. But whenever a company is getting more than, say, 10% of its cash from operations from these dubious sources, investors ought to make sure to refer to the filings and dig in.

With questionable cash flows amounting to only 4.9% of operating cash flow, Regal Beloit's cash flows look clean. Within the questionable cash flow figure plotted in the TTM period above, other operating activities (which can include deferred income taxes, pension charges, and other one-off items) provided the biggest boost, at 3.2% of cash flow from operations. Overall, the biggest drag on FCF came from capital expenditures, which consumed 26.3% of cash from operations.

A Foolish final thought
Most investors don't keep tabs on their companies' cash flow. I think that's a mistake. If you take the time to read past the headlines and crack a filing now and then, you're in a much better position to spot potential trouble early. Better yet, you'll improve your odds of finding the underappreciated home-run stocks that provide the market's best returns.

If you're interested in companies like Regal Beloit, you might want to check out the jaw-dropping technology that's about to put 100 million Chinese factory workers out on the street – and the 3 companies that control it. We'll tell you all about them in "The Future is Made in America." Click here for instant access to this free report.

We can help you keep tabs on your companies with My Watchlist, our free, personalized stock tracking service.

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Minor News Moves Citigroup Up

On a day when the markets are otherwise flat, Citigroup (NYSE: C  ) shares are trading up roughly 0.5% halfway through the trading day, seemingly on no news other than some changes at some senior positions at the bank. The stock move is slightly less than its median daily move over the past 12 months, so it was to be expected, but let's take a closer look at those changes and what they could mean for the future of the bank.

But first, the sector
The rest of the Big Four banks have also stayed put for the most part this morning:

JPMorgan Chase recovered from earlier losses this morning and is now flat. Wells Fargo is up 0.53% amid a residual Buffett blessing from last week. Bank of America remains highly traded per usual and is up 0.67%. The KBW Bank Index (DJINDICES: ^BKX  ) is up 0.59%.

Citigroup shouldn't react as much as the others to housing data set to be released this week, but it doesn't make that information any less important for people that keep an eye on banks. As the overall economy continues to improve -- housing is only one measure to look at -- profits at big banks should continue to reap the rewards.

Senior shuffling at Citi
With the departure of CitiMortgage CEO Sanjiv Das planning on leaving the bank to pursue "other opportunities," Citibank CEO Michael Corbat announced a new leader at that division, prompting a shuffling of the deck at some of Citibank's most senior positions. Jane Fraser will move from the CEO seat at Citi's private bank into Das' old position. Mark Mason, current CEO of Citi Holdings, will take over the private bank, while Francesco Vanni d'Archirafi goes to Citi Holdings.

Citi Holdings could perhaps be the most important position of these moves, as the division manages all of the non-core assets that Citigroup is winding down or selling. At the end of the previous quarter, Citi Holdings accounted for 8% of the bank's total assets, a fairly significant amount. Vanni d'Archirafi will look to continue the work of Mason, who managed to reduce the account 29% over the previous year, allowing the bank to continue to focus on its core businesses.

Citigroup's stock looks tantalizingly cheap. Yet the bank's balance sheet is still in need of more repair, and there's a considerable amount of uncertainty after a shocking management shakeup. Should investors be treading carefully, or jumping on an opportunity to buy? To help figure out whether Citigroup deserves a spot on your watchlist, I invite you to read our premium research report on the bank today. We'll fill you in on both reasons to buy and reasons to sell Citigroup, and what areas Citigroup investors need to watch going forward. Click here now for instant access to our best expert's take on Citigroup.

Greece Holds Out Hope for 2013 Budget Target

ATHENS, Greece (AP) -- Greece's finance minister pledged Tuesday to stick with unpopular austerity measures and correct years of profligate state spending, in the hope of securing a budget surplus this year that could pave the way for a new debt reduction deal.

"We still face a hard road ahead, until Greece can access markets again," Yannis Stournaras told a press conference. "But we have covered at least two thirds of the way, as far as fiscal adjustment goes, and three quarters of the way on competitiveness."

Stournaras was speaking a day after Greece struck a deal with creditors expected to secure it 8.8 billion euros in further loan payments from its international creditors. The deal followed weeks of tough negotiations and will include a taboo-breaking 15,000 layoffs in the public sector.

The minister told the press conference Tuesday that the country's next main target is to achieve a primary surplus -- which excludes the cost of servicing the huge public debt -- on its budget in 2013, a year ahead of target. Athens hopes that by reaching this milestone, it will get further debt relief from its creditors.

The country has been locked out of international bond markets after its economy imploded in 2010, and been kept afloat by rescue loans from its European partners and the International Monetary Fund. In exchange, it has implemented harsh and deeply resented austerity measures, slashing incomes, hiking taxes, and overhauling an inflated, largely inefficient public sector.

The cutbacks fueled a deep recession, now in its sixth year, while pushing unemployment to a record 27 percent. Almost 1,000 jobs have been lost every day over the past three years in the private sector.

The main left wing opposition leader, Alexis Tsipras, said the measures have left "social wreckage" in their wake, and urged action to revive the economy.

"How can they say our sacrifices are paying off when the country is slumped in recession and the public finances are being destroyed?" the Syriza party head said at a business conference. "Every year, recovery is delayed until the following year."

Tsipras said Greece needs an immediate change of course, "the same way a heart attack patient needs an electric shock."

Labor unions have reacted with a series of general strikes and demonstrations that often ended in street riots but failed to put the brakes on austerity.

On Tuesday, Greek islands were left without ferry links with the mainland due to a 24-hour strike by seamen, while state railway workers were also to hold brief work stoppages.

Monday's deal with the creditors included 15,000 layoffs in the public sector, which was for decades considered a secure and undemanding work environment where nepotism ran rife. However, the government will be allowed to break a hiring freeze and replace all sacked employees.

Stournaras said legislation on the agreed measures would be passed "the soonest possible" to ensure payment of the loan installments.

He said a further priority was to complete by the end of this month the recapitalization of Greece's banking sector, which took bad losses from last year's public debt writedown. Ministry and banking officials say some 20 billion euros in deposits have returned to domestic lenders after a strong outflow during political instability last summer.

Get Ready for Microsoft's 7-Inch Surface

Smaller tablets are all the rage these days. Tablets with displays of 7 inches to 8 inches are turning out to be the sweet spot with consumers, balancing mobility and usability while carrying lower price points relative to larger tablets with displays of 9 inches to 10 inches.

Amazon.com (NASDAQ: AMZN  ) was the first to show the market the way, with its 7-inch Kindle Fire being the first mover in the smaller-sized segment. Google (NASDAQ: GOOG  ) followed suit nearly a year later with the Nexus 7. Even Apple (NASDAQ: AAPL  ) has come around, launching its iPad Mini late last year, which is quickly eating into full-sized iPad sales.

Now Microsoft (NASDAQ: MSFT  ) is preparing to get in the 7-inch game, according to a recent report from The Wall Street Journal. Insiders say that a 7-inch Surface is set to enter production later this year, which is a relatively recent development since last year Microsoft had no plans for such a device. The WSJ report is but the latest piece of evidence pointing toward Microsoft's inevitable move downmarket.

Not only has the software giant been incentivizing OEMs to explore smaller touchscreen devices through a series of discounts and price cuts, but also Microsoft's upcoming Windows 8.1 update (code-named "Blue") will include support for 7-inch tablets.

The company has also tweaked its guidelines for Windows certification to a similar effect, reducing the minimum supported resolution. The company said the change was not meant to encourage OEMs to use lower resolutions, but instead was to allow them to explore "designs for certain markets."

In doing so, the company also seemingly acknowledged that its choice of a 16:9 aspect ratio may have been misguided, since using Surface in portrait mode is comical at best and downright awkward at worst. Microsoft is opening the door to a 4:3 aspect ratio, which is what Apple uses in its iPads with much success (Amazon and Google both use 16:10).

Even Amazon is having a hard time selling its 8.9-inch Kindle Fire HD. The e-tailer just got aggressive with that device's pricing, and the price drop presumably isn't because Amazon was selling so many of them.

Microsoft has no choice if it hopes for any semblance of tablet success. A 7-inch Surface is coming.

It's been a frustrating path for Microsoft investors, who've watched the company fail to capitalize on the incredible growth in mobile over the past decade. However, with the release of its own tablet, along with the widely anticipated Windows 8 operating system, the company is looking to make a splash in this booming market. In this brand-new premium report on Microsoft, our analyst explains that while the opportunity is huge, the challenges are many. He's also providing regular updates as key events occur, so make sure to claim a copy of this report now by clicking here.

Limits to stretch IRAs floated to pay for highway repairs

(iStock)

When Congress returns from its July 4 recess next week, the Senate tax-writing panel will resume its effort to pass a bill that would pay for highway repairs in part by changing policy toward inherited individual retirement accounts.

The provision, part of a bill before the Senate Finance Committee, would require the distribution of IRAs within five years of the death of the account holder, with some exceptions — including cases where the recipient is a spouse, minor or whose age is within 10 years of the person who died. Under current law, distributions can be stretched over the life of the beneficiary, which can be many years if he or she is young.

A committee summary of the bill says that limiting so-called stretch IRAs would raise $3.7 billion over 10 years. The entire bill, which includes several other provisions, would raise a total of about $8 billion for the Highway Trust Fund.

The highway fund must be reauthorized by Congress. It could start running out of money in August, according to the Department of Transportation, which could halt local projects.

On Tuesday, President Barack Obama challenged Congress to act quickly or else put at risk tens of thousands of layoffs related to road-work jobs.

The Senate Finance Committee began a markup of a highway-financing bill on June 26. The session recessed prior to a vote. The panel will reconvene as soon as possible after lawmakers return to Washington next week, according to Ryan Carey, a spokesman for committee Chairman Ron Wyden, D-Ore.

“I've bent over backward to come up with the most benign, agreeable offsets possible,” Mr. Wyden said in remarks prepared for the June 26 meeting. “Rather than raising taxes, the legislation includes measures designed to boost tax compliance — to make sure people pay taxes they owe.”

Curbing inherited IRAs “is one of the least painful revenue raisers waiting to be used,” said Clint Stretch, senior tax policy counsel at Tax Analysts, a consulting and publishing firm. “This is not really a tax increase, it's a tax acceleration.”

It has been on the congressional shelf for many years and often is proposed to pay for spending priorities.

Michael Kitces, a partner and director of research at Pinnacle Advisory Group, wrote about limits on stretch IRAs in 2012 highway funding discussions in his blog, Nerd's Eye View.

As is the case today, there’s no guarantee that stretch IRAs will be tapped as a highway funding source, Mr. Kitces wrote in 2012. But he recommended that investment advisers be cognizant of the possibility.

“It may be best practice when discussing estate planning matters with clients to at least acknowledge the risk that by the time the client's estate plan is actually implemented, a stretch IRA may no longer be an arrow in the estate planner's quiver,” Mr. Kitces wrote.

Once a tax-reform idea is pu! t on the table at the Capitol, it's rarely taken off. In the case of inherited IRAs, the opponents have already been identified, and new ones won't likely be created, according to Mr. Stretch.

“You know who you're going to offend,” Mr. Stretch said. “It will always come up.”

Highway projects are usually funded by gasoline taxes. It's unclear what approach the Republican-majority House will take.