Insights

Is the Commonwealth Bank (ASX:CBA) share price in the buy zone?

The Commonwealth Bank of Australia (ASX:CBA) share price has been a strong performer this week. Is it too late to invest?
The post Is the Commonwealth Bank (ASX:CBA) share price in the buy zone? appeared first on Motley Fool Australia. –

Woman in mustard yellow blouse on laptop holds both hands out to either side with graphic illustration of question marks above them

The Commonwealth Bank of Australia (ASX: CBA) share price has been a positive performer this week.

Since the end of last week, the banking giant’s shares have charged 7% higher to $74.40.

Why is the Commonwealth Bank share price charging higher?

Investors have been buying Commonwealth Bank’s shares for a couple of reasons this week.

The first is of course the COVID-19 vaccine news which has put a rocket under the S&P/ASX 200 Index (ASX: XJO).

The prospect of the pandemic ending sooner than expected has sparked optimism that the economic impact may not be as bad as feared.

In addition to this, the release of a better than expected first quarter update and a sharp reduction in COVID-19 loan deferrals has given its shares a boost.

Is it too late to invest?

One leading broker that believes it is too late to invest is Goldman Sachs.

This morning its analysts reiterated their sell rating and cut the price target on Commonwealth Bank’s shares to $65.24.

Goldman Sachs believes its weak operational performance doesn’t justify the premium the bank’s shares trade at and sees better value elsewhere in the sector.

The broker explained: “Weak operational performance does not justify PER premium. While CBA’s balance sheet is strong, with a sector leading capital and provisioning position, CBA’s operational performance in 1Q21, particularly as it relates to costs, does not justify the 24% premium it is currently trading on versus peers (versus 15% 15-yr average). Coupled with our revised 12-month TP implying 6% downside, we remain Sell rated.”

Which bank should you buy?

As of last week, Goldman Sachs’ top pick was National Australia Bank Ltd (ASX: NAB). It had a conviction buy rating on the bank’s shares. However, its price target stands at $21.18, which is now lower than the current NAB share price of $21.82.

The broker also has a buy rating on Westpac Banking Corp (ASX: WBC) shares, with a $19.60 price target. This compares to its last close price of $18.73.

Man who said buy Kogan shares at $3.63 says buy these 3 ASX stocks now

When investing expert Scott Phillips has a stock tip, it can pay to listen. After all, the flagship Motley Fool Share Advisor newsletter he has run for more than eight years has provided thousands of paying members with stock picks that have doubled, tripled or even more.*

In this FREE STOCK REPORT, Scott just revealed what he believes are the 3 ASX stocks for the post COVID world that investors should buy right now while they still can. These stocks are trading at dirt-cheap prices and Scott thinks these could really go gangbusters as we move into ‘the new normal’.

Find out the names of our 3 Post COVID Stocks – For FREE!

*Returns as of 6/8/2020

More reading

Motley Fool contributor James Mickleboro owns shares of Westpac Banking. The Motley Fool Australia has no position in any of the stocks mentioned. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

The post Is the Commonwealth Bank (ASX:CBA) share price in the buy zone? appeared first on Motley Fool Australia.

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!