CBA was driven higher by momentum traders into the EOFY, pushing it up to ~$190/sh, but ever since, it has peeled away, closing ~14% below this year’s high on Monday. While CBA is by no means ‘cheap’, it’s cheaper than it was a few months ago, and clearly some of the momentum money has exited. We still prefer ANZ, even after recent outperformance, believing it has greater ‘self-help’ upside relative to CBA, and the 10 PE point premium held by CBA could further erode. That’s not to say that CBA should not trade at a premium, it has a better technology stack positioned more favourably for the world of AI, however the current premium still feels excessive.
- We see some value re-emerging in CBA around $165, though we believe ANZ’s update yesterday was solid, and should help to regain some of the markets lost confidence over the years, as long as they execute.
MM still prefers ANZ to CBA at current levels
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ANZ Group (ANZ) v Commonwealth Bank (CBA)
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ANZ Group (ANZ) v Commonwealth Bank (CBA)
