Brokers give their verdict on the CBA (ASX:CBA) share price

Is the CBA share price in the buy zone?
The post Brokers give their verdict on the CBA (ASX:CBA) share price appeared first on The Motley Fool Australia. –

The Commonwealth Bank of Australia (ASX: CBA) share price has run out of steam and is trading lower on Thursday.

In afternoon trade, the banking giant’s shares are down 2.5% to $105.43.

Why is the CBA share price under pressure?

The weakness in the CBA share price on Thursday is likely to have been driven by the release of a couple of bearish broker notes this morning.

In response to the bank’s full year results, both Citi and Credit Suisse downgraded the company’s shares to the equivalent of sell ratings.

Citi has downgraded CBA’s shares to a sell rating and cut the price target on them to $94.50. Whereas Credit Suisse has downgraded its shares to an underperform rating with a $95.00 price target.

Both brokers have reduced their near term earnings estimates to reflect higher costs.

Is anyone bullish?

One leading broker that remains positive is Bell Potter. This morning the broker upgraded the bank’s shares to a buy rating with an improved price target of $118.00.

Based on the current CBA share price, this implies potential upside of 12% over the next 12 months.

Bell Potter commented: “The main changes to our cash NPAT (continuing) projections relate to higher noninterest income (mainly higher card fees, fee waivers and removal of wealth contributions) as well as a still lower LIE charge in FY22 and beyond.”

“Given these, cash NPAT is now 2% higher in FY22, FY23 and FY24. We have also matched the statutory and cash dividend payout ratios as follows: FY22 75%; FY23 75%; and FY24 75%. As a result, we have increased the valuation and price target by $13.00 to $118.00 per share and this includes adding the value impact of higher excess CET1 capital. CBA’s target share price has done well in the past three months and up by more than 25% in absolute terms. The rating is now back to a Buy,” it added.

The post Brokers give their verdict on the CBA (ASX:CBA) share price appeared first on The Motley Fool Australia.

Should you invest $1,000 in CBA right now?

Before you consider CBA, you’ll want to hear this.

Motley Fool Investing expert Scott Phillips just revealed what he believes are the 5 best stocks for investors to buy right now… and CBA wasn’t one of them.

The online investing service he’s run for nearly a decade, Motley Fool Share Advisor, has provided thousands of paying members with stock picks that have doubled, tripled or even more.* And right now, Scott thinks there are 5 stocks that are better buys.

*Returns as of May 24th 2021

More reading

CBA’s bumper profit, IAG’s loss and Telstra expectations. Scott Phillips on Nine’s Late News

Why AGL, Appen, CBA, & Rio Tinto shares are tumbling lower

Top brokers name 3 ASX shares to sell today

What impact has BNPL giant Klarna had on the CBA (ASX:CBA) share price?
ASX 200 rises, CBA climbs after FY21 report, Iress jumps

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

Trade The World Anywhere & Anytime!

Mobile app platform with over 50,000 global listed securities across 12 markets (over 70% global market capitalisation), right from your Android or iOS device.

Integrated with exclusive trading idea and investment analysis tools to help you find actionable insight on virtually every financial instrument across our 12 global markets, to help you optimise your trading strategies.

Refer Your Friends

Tell your friends about Monex and gift them FREE access to our trading tools.

We respect your privacy and will only send this one email notification to your friends. 

Share With Your Friends

Share on facebook
Share on twitter
Share on linkedin

Monex Trading Tools Access and Usage Terms

The Monex Trading Tools (referred to as ‘tools’ hereafter) are available to you inside your client portal;

To activate access to the tools, you must have a verified and approved trading account and have made a deposit of at least AUD $1000.

An active and funded account with a positive trading balance is required to continue to have access to the tools;

Although the tools are available to you indefinitely, Monex Securities may at it’s discretion disable access to the tools in the future;

Monex securities reserves the right to change these terms and conditions from time to time, as it sees fit, without notice.

Important Notice
iOS & Android App - 12 International Markets & Over 70% Global Market Cap. $0 Brokerage On US Trades. Click Here!