Commonwealth Bank of Australia (ASX: CBA) has gone from market darling to market headache in just a few months. Here’s what’s really happening with the CBA share price, and what the latest forecasts say as of 2 December 2025.
Where the CBA share price sits today
As of around midday on 2 December 2025, Commonwealth Bank of Australia (CBA) shares are trading near A$152 on the ASX. Google Finance shows a previous close of A$151.64, a 52‑week range of A$140.21 to A$192.00, a market cap of about A$254 billion, a P/E ratio around 25x, and a dividend yield near 3.2% at these levels. [1]
Those headline numbers don’t scream “crisis”. The problem is the path CBA took to get here.
- Earlier in 2025, CBA hit a high around A$192, making it the first ASX company to push past a A$300 billion valuation and one of the most expensive bank stocks in the world on standard valuation metrics. [2]
- Since that mid‑year peak, the share price has fallen about 20%, according to recent coverage tracking the stock into the start of December. TS2 Tech
- The damage has accelerated lately: a fresh analysis from The Motley Fool notes that CBA shares are down nearly 14% over the past month, and down roughly 20% since June. [3]
- A separate piece highlights that CBA fell more than 11% in November alone, making it one of the ASX 200’s worst‑performing blue chips for the month. [4]
In other words: the stock is still very expensive, but the market has started to rethink how much of a premium it’s willing to pay.
The fundamentals: record FY25 profit, strong capital, ugly reaction
From an earnings and balance sheet perspective, CBA is not a “broken” business. In fact, FY25 was a high‑water mark.
Record FY25 results
For the year to 30 June 2025, CBA reported: [5]
- Record full‑year cash profit of A$10.25 billion, slightly above market expectations and up from A$9.84 billion in FY24.
- A record full‑year dividend of A$4.85 per share, including a final dividend of A$2.60.
- Net interest margin (NIM) rising to about 2.08%, helped by prior rate rises and loan growth.
- Home lending up ~6.1% and business lending up ~12.2%, both outpacing system growth.
- A common equity tier 1 (CET1) capital ratio around 12.3%, comfortably above regulatory minimums.
Despite that, investors largely shrugged – or worse. CBA’s share price fell around 5% on the day of the results, with critics arguing that even excellent numbers couldn’t justify such a rich valuation relative to global peers. [6]
The Guardian’s coverage captured the political and social backdrop: record profits and record dividends reignited debate over bank fairness, as consumer advocates pushed CBA to repay around A$270 million in fees to more than 2 million low‑income customers, and climate groups scrutinised its new policies restricting finance to coal companies lacking net‑zero plans. [7]
So by August, the narrative had already shifted from “CBA is unstoppable” to “CBA is very good, but very expensive and politically exposed.”
Q1 FY26 trading update: profits up, margins squeezed, market spooked
The next big catalyst was the 1Q26 trading update on 11 November 2025 – and this is where the recent sell‑off really accelerated.
The numbers
In its September‑quarter update, CBA reported: [8]
- Cash NPAT around A$2.6 billion, up about 2% year‑on‑year and slightly above the average of the previous two quarters.
- Total operating income up ~3% for the quarter.
- Strong volume growth:
- Home loans up A$9.3 billion, growing at roughly 1.1x system.
- Household deposits up A$17.8 billion, at about 1.2x system.
- Retail transaction accounts increasing by more than 175,000 in the quarter.
- Business banking still expanding, with business transaction accounts up about 7% versus the prior comparative period and lending growth diversified across sectors.
- Loan impairment expense of about A$220 million, just 9 basis points of the loan book, with home‑loan arrears actually improving to 0.66% and total credit provisions steady around A$6.4 billion.
- CET1 ratio of 11.8% (Level 2), comfortably above the Australian Prudential Regulation Authority (APRA) minimum and up about 33 basis points before dividends.
The weak spot? Margins and costs.
CBA said its headline net interest margin fell due to “mix effects” – notably strong growth in lower‑yielding liquid assets and institutional deposits – while operating expenses rose about 4%, driven by wage inflation and IT spending. [9]
How the market reacted
On paper, a 2–3% profit lift doesn’t sound disastrous. But investors clearly hated the detail.
- Reuters described CBA as one of the world’s most expensive major banks, with price‑to‑earnings and price‑to‑book multiples more than double global averages, and noted that shares fell nearly 5% on the day of the update. [10]
- ABC’s live markets blog called CBA the “story of the day”, reporting that the stock plunged over 6% to about A$163–164, erasing roughly A$18.5 billion in market value in a single session, as traders worried about margin compression and rising costs despite solid headline profit growth. [11]
That combination – still‑strong earnings, but weakening margins, higher costs and a premium valuation – cemented the idea that CBA’s re‑rating might not be finished.
Valuation: still pricey after a 20% pullback
Even after the sell‑off, CBA is trading on multiples that many analysts argue are stretched.
- At around A$152, Google Finance puts CBA on a trailing P/E of about 25x and a price‑to‑book ratio around 3.2x, with a dividend yield of roughly 3.2%. [12]
- Dividend data provider Digrin, using slightly different inputs, shows the bank on a forward dividend yield of about 3.4%, with three‑year dividend growth of just over 10% – strong growth, but not enough in many analysts’ eyes to justify such a high earnings multiple versus global peers. [13]
- Earlier in the year, coverage in News.com.au and other outlets highlighted that CBA’s market value had surged past A$300 billion, with critics arguing the stock was as much as 50% above fair value and “the most expensive bank stock in the world” once you adjust for earnings and yield. [14]
When you put those together, you can see why the market has decided that even excellent results might not be good enough at the old price.
What analysts are saying now: “excellent bank, stretched price”
Broker and consensus forecasts
On the institutional side, the message is remarkably consistent: fantastic franchise, limited upside at current levels.
- TipRanks, which aggregates “Wall Street” and Australian broker views, shows a consensus rating of “Strong Sell” on CBA based on 11 analyst recommendations. Over the past three months, there have been 0 Buys, 0 Holds and 11 Sells. [15]
- The average 12‑month price target on TipRanks is about A$123.15, with a range from roughly A$96 (bear case) to A$146 (bull case). That implies around 19% downside from the A$152–153 area. [16]
- TradingView’s forecast page shows a very similar picture: an average target around A$124, with maximum A$146 and minimum A$96.07. [17]
- Fintel’s compilation of broker targets puts the average one‑year target near A$125, with a range from about A$97 to A$153. [18]
Broadly, that says: fair value somewhere in the low‑A$120s, with a handful of more optimistic and more pessimistic outliers.
Several research notes (summarised in TechStock²’s 1 December outlook) add colour to that consensus: TS2 Tech+1
- Some brokers (e.g. UBS) maintain Sell ratings with targets around A$120–A$130, arguing that CBA’s premium makes it especially vulnerable if margins compress further or credit losses normalise.
- Others (e.g. more conservative value houses) accept that CBA is high quality but see a 30–40% downside in bearish scenarios where earnings disappoint and the market re‑rates the bank closer to global peers.
Motley Fool commentary has gone even further at times, with recent pieces asking “How low could CBA shares go in 2026?” and pointing out that, based on some fair‑value models, investors could face downside of more than 37% from current prices if sentiment really turns. [19]
Today’s commentary (2 December 2025)
New analysis published today leans the same way:
- One Motley Fool piece notes that the CBA share price has dropped nearly 14% over the last month, blaming the fall on overvaluation and modest earnings growth, and questions whether the stock is still too expensive even after the pullback. [20]
- Another asks whether CBA shares are a buy amid rising interest rates, pointing out that the stock is down about 20% since June, and weighing the benefits of strong profitability and dividends against the risk of further de‑rating. [21]
- Rask Media and Kalkine Media both published pieces exploring whether CBA can beat the ASX 200 in 2025, using valuation models (P/E comparisons and dividend‑discount models) to show that relative to peers, CBA still trades on a significant multiple premium that leaves little margin for error. [22]
Dividends: powerful, but no longer a “cheat code”
For many Australian investors, fully franked bank dividends are the main attraction – and CBA remains a heavyweight here.
- The FY25 dividend of A$4.85 per share was the bank’s highest ever, according to Reuters and company disclosures. [23]
- Dividend trackers show the most recent payment of A$2.60 per share in late September 2025, with forward dividend yield estimated around 3.3–3.4% at current prices. [24]
- Digrin estimates three‑year dividend growth of just over 10% per year, and projects continued increases into 2026 and beyond, albeit at a slower pace. [25]
That’s solid, but not spectacular, given the risk profile of a major bank, especially when:
- Smaller or cheaper banks on the ASX can offer higher starting yields.
- Term‑deposit and cash rates, while lower than their 2023–24 peaks, are still high enough that some investors are demanding fatter margins of safety from equities.
This is why many analysts frame CBA as a quality income stock with a valuation problem, rather than a broken dividend story.
Macro backdrop: higher‑for‑longer rates, housing strength and regulatory pressure
CBA lives at the intersection of housing, interest rates and regulation, and 2025 has been noisy on all three fronts.
- Australia’s inflation surprised on the upside in the September quarter, pushing trimmed‑mean inflation back above the RBA’s 2–3% target band and prompting many economists – including CBA’s own research team – to abandon forecasts for further rate cuts in early 2026. TS2 Tech+1
- ABC reporting from 18 November quoted CBA CEO Matt Comyn telling a parliamentary hearing that it is “unlikely” interest rates will move much in 2026, reinforcing a higher‑for‑longer narrative that is good for margins in theory, but harder on mortgage customers and credit quality. [26]
- Regulators are also circling. Coverage summarised by TechStock² notes that APRA has introduced debt‑to‑income caps on parts of banks’ home‑loan books to pre‑empt a build‑up of risk, with rating agency Fitch seeing the move as modestly negative for banks’ growth ambitions. TS2 Tech
For CBA, that creates a delicate balancing act:
- Higher rates and strong loan demand support earnings now.
- Regulatory caps, political scrutiny, and stretched household budgets increase the chance that future loan growth is slower and loss rates eventually normalise from current ultra‑low levels.
Investors are effectively asking: how long can CBA keep compounding earnings at an above‑system pace in that environment?
Strategy and AI: long‑term upside, short‑term costs
One reason bulls still like CBA is its technology and data strategy.
According to recent CBA announcements and analysis pulled together by TechStock²: TS2 Tech+1
- The bank plans to lift annual technology investment by around A$300 million to roughly A$2.3 billion, with a heavy focus on modernising core systems and embedding artificial intelligence into customer journeys.
- CBA has struck multi‑year partnerships with cloud providers and AI specialists to build an internal “AI factory” and provide staff with enterprise‑grade generative AI tools.
- On 26 November, CBA announced the appointment of Ranil Boteju as its inaugural Chief AI Officer, effective early 2026, signalling that AI is moving from experiment to core strategy.
- Independent benchmarks such as the Evident AI Index rank CBA among the top global banks on AI readiness and execution.
From a shareholder perspective, this is a classic long‑term bet:
- Short term: tech and AI spending push costs higher and suppress the cost‑to‑income ratio.
- Long term: if done well, automation and better risk modelling could lower operating costs, reduce credit losses and deepen customer relationships, justifying at least some valuation premium.
The market’s current wobble suggests that, at A$190+, investors were effectively pricing in flawless execution on this strategy. At A$150‑ish, the price implies more doubt – but not disaster.
Quant and technical models: what the algorithms say
Algorithmic and technical‑analysis sites don’t agree with each other, but they’re useful sentiment thermometers.
- StockInvest.us reports that CBA closed at A$151.64 on 1 December 2025, down 0.57% on the day, with the price slipping about 2.7% over the last two weeks. It notes that falling volume alongside the price decline can, paradoxically, be a mild positive signal – suggesting selling pressure may be easing. [27]
- TradersUnion’s forecast for CBA suggests:
- Over the next week, the price could hover around A$151–A$152, essentially flat. [28]
- Over four weeks, their model projects a possible dip toward the mid‑A$130s, though they present this as one scenario among many. [29]
- For 2026, TradersUnion expects the share price to fluctuate roughly between A$143 and A$175, with an average around A$159, and suggests that by 2029 the stock could reach about A$208 if earnings grow as assumed. [30]
It’s important to stress: these are statistical extrapolations, not guarantees. They mainly reinforce the broader theme:
Short‑term: more volatility ahead, with real risk of a further leg down if sentiment sours.
Long‑term: models still assume CBA will grow earnings and dividends enough to make new highs later in the decade.
Key risks and opportunities for CBA shareholders
Putting the pieces together, the debate around CBA on 2 December 2025 can be boiled down to a set of trade‑offs.
The bullish case
Supporters of the stock generally highlight: [31]
- Dominant market position in Australian retail and business banking, underwriting roughly a quarter of the country’s A$2.2 trillion mortgage market and growing home and business lending above system.
- Resilient profitability, with record FY25 cash profit, high returns on equity and historically low credit‑loss rates.
- Strong capital and funding, including a CET1 ratio comfortably above regulatory minima and a funding base anchored by household deposits (around 79% of total funding).
- Consistent, fully franked dividends with solid growth, backed by robust cash generation.
- Technology and AI investments that could entrench CBA’s competitive lead and deliver structural cost savings over time.
From this angle, the recent share‑price fall is seen as a normal de‑rating after an overheated run, not the start of a structural decline.
The bearish case
Sceptics focus on: [32]
- Valuation risk: even after a ~20% fall, CBA still trades on 25–30x earnings and a 3–3.5% yield, far richer than most global banks and richer than many domestic peers. That leaves little room for disappointment.
- Margin and cost pressure: NIM is already under pressure from competition and balance‑sheet mix, while expenses are rising faster than revenue thanks to wages and tech spending.
- Regulatory and political headwinds: APRA’s lending caps, ongoing scrutiny of bank fees, and climate‑related lending policies limit how aggressively CBA can push pricing or cost‑cutting without backlash.
- Macro fragility: higher‑for‑longer rates and high household debt raise the risk that credit quality eventually deteriorates from today’s very benign levels.
- Crowded ownership: as Australia’s largest listed company and a major index constituent, CBA is heavily owned by passive funds, which can amplify both rallies and sell‑offs when sentiment shifts.
From this perspective, the sell‑off is not necessarily over, and consensus price targets around A$120–A$130 may prove optimistic if the cycle turns.
What it all means for investors (and for Google‑News‑scrolling humans)
As of 2 December 2025, the story of Commonwealth Bank of Australia shares looks something like this:
- CBA the business is in robust shape: record profits, strong capital, growing loans and deposits, and an aggressive technology strategy.
- CBA the stock is working through a classic valuation hangover after a euphoric run that pushed it to one of the highest‑valued banks on the planet.
Latest news, forecasts and commentary agree on two essential points:
- Quality is not in doubt.
- Price very much is.
For some investors – especially income‑focused holders comfortable with bank risk and long holding periods – the current pullback might look like a chance to accumulate a premier franchise at a slightly less nosebleed valuation.
For others, the combination of bearish analyst consensus, premium multiples, margin pressure and macro uncertainty suggests there could be better risk‑reward elsewhere in the market until the dust settles.
Either way, the CBA share price in late 2025 is a useful reminder of a simple investing rule that survives every cycle:
Even great businesses can be bad investments if you overpay – and even great banks eventually get re‑rated when the story gets too perfect.
References
1. www.google.com, 2. www.news.com.au, 3. www.fool.com.au, 4. www.fool.com.au, 5. www.reuters.com, 6. www.reuters.com, 7. www.theguardian.com, 8. www.reuters.com, 9. announcements.asx.com.au, 10. www.reuters.com, 11. www.abc.net.au, 12. www.google.com, 13. www.digrin.com, 14. www.news.com.au, 15. www.tipranks.com, 16. www.tipranks.com, 17. www.tradingview.com, 18. fintel.io, 19. www.fool.com.au, 20. www.fool.com.au, 21. www.fool.com.au, 22. www.raskmedia.com.au, 23. www.reuters.com, 24. www.digrin.com, 25. www.digrin.com, 26. www.abc.net.au, 27. stockinvest.us, 28. tradersunion.com, 29. tradersunion.com, 30. tradersunion.com, 31. www.reuters.com, 32. www.reuters.com
