SYDNEY, July 16, 2026, 09:05 AEST
- CBA was the only one of the Big Four to post a gain on Wednesday, beating an equal-weighted mix of the other three majors by 0.98 percentage point.
- The stock’s trailing P/E is 48% higher than the group average. Using the average instead on CBA’s profits shaves around A$91.8 billion from its market cap.
- CommBank will report full-year results and declare its final dividend on August 12.
Commonwealth Bank of Australia ASX:CBA heads into Thursday trading with roughly A$92 billion in market value that comes from its premium versus the next three biggest domestic rivals, based on Wednesday’s close. All eyes now shift to its August 12 results, which are shaping up to be more about justifying the current price tag than any stability story.
Wednesday’s session was mostly steady. CBA added 0.41% to A$170. National Australia Bank Ltd ASX:NAB slipped 1.11%. Westpac Banking Corp ASX:WBC edged down 0.16% and ANZ Group Holdings Ltd ASX:ANZ dropped 0.44%. The ASX was in pre-open at press time, with normal trading set to start at 09:59:45 Sydney time.
The company’s full-year results and final dividend are set to drop in less than four weeks. Data from TradingView, mentioned by Motley Fool Australia on Tuesday, put 11 out of 16 analysts at strong-sell, three at sell, and two at hold. The average target is A$126.51, which is 25.6% under where the stock closed Wednesday. Shares are moving against that analyst split.
CBA is trading on a trailing P/E of 27.51, well above NAB, Westpac and ANZ’s equal-weighted average of 18.63. That puts CBA at a 47.7% premium to its major bank rivals. The stock’s dividend yield, at 2.91%, is 1.48 points under the group average.
| Bank | July 15 close | One-day move | Trailing P/E | Dividend yield | Market value |
|---|---|---|---|---|---|
| CBA | A$170.00 | up 0.41% | 27.51 | 2.91% | A$284.49bn |
| NAB | A$39.27 | down 1.11% | 19.59 | 4.33% | A$122.42bn |
| Westpac | A$36.58 | off 0.16% | 18.03 | 4.21% | A$125.11bn |
| ANZ | A$35.95 | fell 0.44% | 18.27 | 4.62% | A$108.42bn |
| Three-peer average | — | down 0.57% | 18.63 | 4.39% | A$118.65bn |
Source: Google Finance closing prices and trailing metrics. Peer averages and premium numbers are equal-weighted; all figures rounded.
Using the peer multiple with CBA’s trailing earnings per share of A$6.18 puts the value at A$115.13 per share, or roughly A$192.7 billion in equity value. That leaves a gap of A$91.8 billion, but this isn’t a price target. It just shows what investors are willing to pay for CBA’s size, safety, and growth prospects.
The reverse math sets the bar for earnings. CBA would need to make about A$9.13 a share to back up a A$170 price using the peer multiple. That’s 47.7% ahead of its trailing EPS. Hitting that in three years means annualised EPS growth has to land close to 13.9%.
| CBA valuation bridge | Calculated value |
|---|---|
| Trailing EPS now | A$6.18 |
| Share price at 18.63x current EPS | A$115.13 |
| Market cap using peers’ multiple | A$192.66bn |
| Difference with actual market cap | A$91.83bn |
| EPS needed for A$170 stock at 18.63x | A$9.13 |
| Annual EPS growth for three years to hit target | 13.9% a year |
Source: Calculations use July 15 Google Finance data. Numbers rounded.
CBA posted a cash net profit after tax of about A$2.7 billion for the March quarter, just above last year’s A$2.6 billion, but about 2% short of what some analysts had expected. Net interest income was up 1%. Net interest margin, the difference between lending income and funding costs, stayed broadly in line after one-off items.
Credit costs rose. Loan impairment charges were up at A$316 million versus A$223 million, with CBA setting aside another A$200 million in collective provisions. Its common equity tier 1 ratio was 11.6% as of March. “Conflict in the Middle East is disrupting critical supply chains and contributing to global uncertainty,” Chief Executive Matt Comyn said in May. Reuters
Scale is one factor for the premium holding up. CBA holds a 25% share in Australia’s home-loan market, and mortgages make up around 60% of total credit books for the Big Four. “This puts an over-reliance on domestic housing for Aussie banks,” K2 Asset Management Managing Director George Boubouras said to Reuters in May. Reuters
But peer multiples only go so far. Market leaders like CBA can stay expensive if investors see less risk, and there’s no rule their valuation has to come down. If the mortgage market slows and costs eat into sales, though, it could be a problem. Morgan Stanley says Aussie mortgage growth could drop to around 3%–4% next year from 7.5%. That would make CBA’s implied 13.9% earnings growth target tougher to hit.
On August 12, investors are set to watch more than profit. Margins, impairments, costs, and the final dividend will be in focus too. A solid result could point to decent banking. Still, at A$170, the valuation demands more than just a steady hand.
