The Commonwealth Bank of Australia share price (ASX: CBA), fresh from setting new all time highs, takes a dip on the day. After leading into the close of the day 0.9% in the red, the pullback from the new high mark of $128.68 stands a little over 2.2%. The $125 level that had proved to be a resistance point through much of early June, now seeming to act as a support line.
The recent ATH propelled CBA closer towards the coveted position of the largest company by market capitalisation on the ASX 200, closely following the mining giant BHP Group Ltd (ASX:BHP)—just AU$8 billion short. This comes amidst divided analyst opinions regarding CBA, making it one of the priciest banking stocks on a global scale. Out of the 17 analysts covering the stock, seven advocate selling while three suggest a moderate buy.
In spite of the surging prices, several financial institutions maintain a conservative outlook. Goldman Sachs has openly maintained a bearish stance on the bank, arguing that its high valuation does not align well with return on equity forecasts, and maintains a sell rating with a target price of AU$82.61. UBS, too, predicts a potential downward correction in the price, setting a 12-month target at AU$105.
However, CBA has demonstrated a strong performance relative to the broader market with a notable 10.7% increase year-to-date, compared to the ASX 200 (+1.73%). As of the latest data, CBA’s market capitalization hovers at AU$210.42 billion, a little way back from BHP’s AU$218 billion.
Although the Australian Consumer Discretionary sector received an upgrade to overweight by UBS, consumer sentiment remains in negative territory, suggesting a complex environment for retail banks like the Commonwealth Bank of Australia.
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