Commonwealth Bank of Australia (ASX: CBA), the nation’s largest bank, is currently in the midst of a dip in sentiment, with the CBA share price down more than 12.5% from the highs set just last month. As another trading week draws to a close, the stock is trading at A$145.60, down mildly (0.23%) on the day yet positive on the week (+1.19%). While this immediate uptick might seem positive, a broader look at the stock’s performance reveals a more mixed picture.
Over the past year, CBA shares have demonstrated significant growth, increasing by 23.39%. However, the year-to-date performance for 2025 shows a decrease of 5.19%, largely following a pattern seen in U.S bank stocks that also rallied strongly post President Trump’s election victory, only to drop as perceived deregulation fails to materialise so far.
Operationally, CBA recently reported its half-year results for FY2025 (ending December 2024), posting a cash net profit after tax (NPAT) of $5.13 billion, a 2% increase year-over-year, slightly exceeding analyst expectations. Earnings per share (EPS) for the half-year came in at 3.07 AUD, also slightly above the estimated 3.04 AUD. Revenue reached $14.10 billion. These positive results were driven by record mortgage and business lending, and a low loan loss rate. CBA declared a fully franked interim dividend of $2.25 per share, a 5% increase from the previous year. Looking ahead, analysts project earnings for FY2025 Q4. The consensus EPS forecast is 3.05 AUD, compared to 2.78 AUD in the same period last year, with an estimated revenue of $14.16 billion.
Despite the generally positive earnings picture, many analysts maintain a cautious, even bearish, outlook on CBA. At the end of last month, the consensus analyst recommendation was a “Strong Sell,” with 7 analysts recommending selling, and none recommending buying or holding. More recent reports indicate that, currently, 9 analysts recommend selling the stock, demonstrating rising bearish sentiment from the analyst community. The consensus CBA price target from analysts is also to the downside at A$111.98. With the latest close at A$145.60, both the high forecast of A$142.00 and a low of A$90.75 reflect a downside view. Whilst price targets are notoriously fickle, and cannot be relied upon alone to make any decisions, they do help build a picture on sentiment.
While acknowledging CBA’s strong market position and operational efficiency, many analysts feel the current share price does not reflect the potential challenges ahead, and that it is priced too high. Broker UBS, has stated that the stock could face a potential decline. They also pointed out that the bank’s valuation is significantly higher than its historical averages.
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CBA’s CEO, Matt Comyn, acknowledged the slowing Australian economy and the pressures of cost of living on consumer demand, although it maintains a commitment to providing services and products. He remains cautiously optimistic, predicting an easing cycle starting in 2025 as inflation moderates. The bank is continuing to invest in technology, including generative AI and data infrastructure, to enhance its services and protect against fraud and cybercrime.
With the bulls no doubt looking to recapture the $150 level, looking back at the chart, and seeing buyers stepping in at $142 could indicate a potential battleground range of support and resistance for the stock in the weeks ahead. With sentiment declining, and markets somewhat uncertain in the short term, there is a little more risk in CBA than we may have seen in recent times. An impressive bull trend for the stock taking a breather can be a healthy sign, but in order for the price to maintain that status, new bulls will need to be found. A break in either direction on strong volume could indicate the next step.
