CFDs are a leveraged product and can result in losses that exceed deposits. Please ensure you fully understand how CFDs work and what their risks are, and take care to manage your exposure. CFDs are a leveraged product and can result in losses that exceed deposits. Please ensure you fully understand how CFDs work and what their risks are, and take care to manage your exposure.

CBA share price: Jeffries turns bullish before FY21 results

‘CBA trading premium [and its] negative broker rating skew has not stopped CBA outperforming.’

  • CBA continues to trade at a premium to its big four peers
  • Jefferies recently upgraded the bank from Neutral to Buy
  • The bank has outperformed ANZ, WBC and NAB over the last 1 and 6-month time horizons
  • Looking to trade bank stocks? Open an IG account​ today.

The Commonwealth Bank of Australia (CBA) has long traded at a premium to its big four peers. Some have argued this is justified: CBA has strong management and a history of operational excellence. And as Jefferies analysts recently put it:

‘CBA trading premium / negative broker rating skew has not stopped CBA outperforming.’

Others have argued that the valuation gap is too stark – that a course correction may be inevitable.

Shifting views

Jeffries recently changed their tune, upgrading CBA from Neutral to Buy following a period of underperformance. This comes as the bank is poised to release its hotly anticipated full-year (FY21) results on 11 August.

The consensus is for the biggest of the big four to report cash earnings of $8,459 million and declare a final dividend of 189 cents per share.

Jefferies is broadly ahead of consensus, expecting CBA to report earnings of $8,485 million and a dividend of 200 cents per share.

The investment bank’s thesis is underpinned by an appeal to quality when compared to other banks in the sector. Some of the key points to support this Buy thesis include: CBA’s tight share register of loyal retail investors, the fact that the bank has continued to operationally outperform its peers, and that the bank's capital position was also above peers.

Jefferies analysts went on to say that:

‘While many question CBA premium it has a stronger shareholder value generation profile than peers and is positioned to exploit franchise disruption as WBC and ANZ pursue aggressive cost reset agendas.’

CBA share price performance comps

The Commonwealth share price has outperformed its big four peers over the last 1 and 6-month horizons. See the table below:


One month performance

Six month performance













Trade CBA here.

Revisiting the past

Looking back at the bank’s most recent quarterly, CBA reported strong growth across a number of key metrics.

The key here was impressive earnings growth: The bank said its third quarter earnings (unaudited cash NPAT) were 24% ahead of the H1 average, coming in at $2.4 billion for the period.

Elsewhere, the bank said expenses edged higher, up 1%, while the bank's 'loan impairment expensive was significantly lower in the quarter' as a result of better economic conditions. It will be interesting to see any commentary at the upcoming FY21 release around that trend reversing – with the recent lockdowns across Sydney and Melbourne – causing concerns of weakening economic conditions.

This information has been prepared by IG, a trading name of IG Limited. In addition to the disclaimer below, the material on this page does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. IG accepts no responsibility for any use that may be made of these comments and for any consequences that result. No representation or warranty is given as to the accuracy or completeness of this information. Consequently any person acting on it does so entirely at their own risk. Any research provided does not have regard to the specific investment objectives, financial situation and needs of any specific person who may receive it. It has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such is considered to be a marketing communication. Although we are not specifically constrained from dealing ahead of our recommendations we do not seek to take advantage of them before they are provided to our clients.
CFDs are a leveraged products. CFD trading may not be suitable for everyone and can result in losses that exceed your initial deposit, so please ensure that you fully understand the risks involved.

Live prices on most popular markets

  • Forex
  • Shares
  • Indices

Prices above are subject to our website terms and agreements. Prices are indicative only. All shares prices are delayed by at least 15 mins.

Plan your trading week

Get the week’s market-moving news sent directly to your inbox every Friday. The Week Ahead gives you a full calendar of upcoming economic events, as well as commentary from our expert analysts on the key markets to watch.

For more info on how we might use your data, see our privacy notice and access policy and privacy webpage.

You might be interested in…

Find out what charges your trades could incur with our transparent fee structure.

Discover why so many clients choose us, and what makes us a world-leading provider of CFDs.

Stay on top of upcoming market-moving events with our customisable economic calendar.