Australia’s largest bank has slipped -6% in 2022 which is a solid performance considering the weakness across risk assets plus they have paid out a $2.10 fully franked dividend in August. This is clearly Australia’s most expensive bank trading on an Est. P/E for 2023 of 16.3x. For as long as I can remember, people have been trying to 2nd guess when its peers will play some valuation catch up but that strategy has proved elusive, CBA continues to deliver quality results but as Australia’s largest mortgage lender the question is how will margins be squeezed next year as mortgages start to become unfixed and borrowers look for value.
- We still like CBA believing the next 10-15% move will be on the upside, it might be too early to consider the potential damage to its loan book next year.
MM remains long and bullish CBA
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