On a global comparison basis, Citi suggests Commonwealth Bank’s current valuation appears extraordinarily full. With mortgage growth set to slow further and strong competition compressing asset spreads, the bank is rated least preferred by the broker.
Moreover, expense growth is set to exceed income growth, while higher anticipated business lending does not play to the bank’s strengths, explains the analyst. Citi retains its Sell rating and $94.50 target price.
Sector: Banks.
Target price is $94.50.Current Price is $97.81. Difference: ($3.31) – (brackets indicate current price is over target). If CBA meets the Citi target it will return approximately -4% (excluding dividends, fees and charges – negative figures indicate an expected loss).
