CBA share price: is the bank a buy heading into its H1 results?

Before the Commonwealth Bank of Australia releases its half-year results, we examine how analysts currently view the stock.

Key dates for CBA investors

The Commonwealth Bank of Australia (ASX: CBA) is set to release its first-half, FY20 financial results on 12 February.

The bank’s interim dividend date is currently set for 19 February; with CBA set to pay this dividend on 31 March.

The company has a current dividend yield of 5.18% and most recently paid a 231 cents per share dividend.

CBA share price: a stretched valuation

CBA is currently Australia’s largest publicly listed company, boasting a market capitalisation of ~$148 billion.

It also remains Australia’s most expensive bank – from a valuation perspective.

Surveying the big four's current price-to-earnings (PE) ratios: on a one-year forward basis, we see that CBA is the most expensive of the banks, trading at a forward PE of 17.2x. Looking at the other members of the big four, we see that Westpac currently trades at 13.6x, National Bank of Australia at 12.5x and ANZ at 12.2x, according to Morgan Stanley.

Investors have taken little heed of such matters, it would seem. In the last twelve months CBA has been the best performing of the big four, with its stock rising ~13% in that period.

The CBA share price currently trades at $84.29 per share – up around 1%, as the ASX 200 flirts with all-time-highs.

Do you own any of the big four banks? You can hedge your downside risk by trading CFDs now.

The analyst view: a bearish take

Besides potential valuation issues, analysts are on average, bearish on CBA’s prospects as we head into the bank’s half-year results.

As it stands, no analyst rates CBA a buy, while six rate it a hold and 10 rate it a sell. The average 12-month price on CBA is $75.30 per share, according to Bloomberg data.

At current levels, such a price target would imply downside of ~10.5%, should analysts be proven correct.

Bell Potter is the most bullish broker, assigning the bank a price target of $86.00 per share.

By comparison, Evans & Partners is the most bearish, with a negative recommendation and a price target of just $65.00 per share. At current price levels that price target would imply downside potential of a little more than 20%.

Other issues facing the big four – including CBA – and identified by Macquarie Wealth Management include margin and fee headwinds, the persistence of regulatory issues, a changing and ever-increasing competitive landscape and a historically weak credit growth outlook.

Ready to start hedging? Open an account with IG today to get started.

IGA, may distribute information/research produced by its respective foreign affiliates within the IG Group of companies pursuant to an arrangement under Regulation 32C of the Financial Advisers Regulations. Where the research is distributed in Singapore to a person who is not an Accredited Investor, Expert Investor or an Institutional Investor, IGA accepts legal responsibility for the contents of the report to such persons only to the extent required by law. Singapore recipients should contact IGA at 6390 5118 for matters arising from, or in connection with the information distributed.

The information/research herein is prepared by IG Asia Pte Ltd (IGA) and its foreign affiliated companies (collectively known as the IG Group) and is intended for general circulation only. It does not take into account the specific investment objectives, financial situation, or particular needs of any particular person. You should take into account your specific investment objectives, financial situation, and particular needs before making a commitment to trade, including seeking advice from an independent financial adviser regarding the suitability of the investment, under a separate engagement, as you deem fit.

Please see important Research Disclaimer.

Seize a share opportunity today

Go long or short on thousands of international stocks.

  • Increase your market exposure with leverage
  • Get spreads from just 0.1% on major global shares
  • Trade CFDs straight into order books with direct market access

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.


Prices above are subject to our website terms and agreements. Prices are indicative only. All shares prices are delayed by at least 20 mins.

The Momentum Report

Get the week’s momentum report sent directly to your inbox every Monday for FREE. The Week Ahead gives you a full calendar of upcoming key events to monitor in the coming week, as well as commentary and insight from our expert analysts on the major indices 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.