What is MM’s updated price target for CBA?
Hi James and M&M, What would be your current target price for CBA? Can you see CBA retesting the $110 again this year? Thank you.
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Answer
Hi Tony,
The simple answer is yes! With CBA breaking back above $106 on Thursday another 3-4% could be regarded as nothing more than intra-week noise although if it doesn’t scale those levels before its estimated $2.31 fully franked dividend, paid in August, it will be a tougher ask.
Australia’s major banks remain strong helped by the perception that inflation is under control and a strong reporting season by their US peers i.e. people are not yet experiencing as much financial stress as had been expected with interest rates soaring higher. However, on current valuations MM’s preferred sector exposures are ANZ, NAB and Macquarie, although we do hold CBA in the Income Portfolio. UBS this week sighted CBA as a high chance of beating on margins at their upcoming results, and that could be the catalyst needed for it to trade back above $110.
