Commonwealth Bank of Australia (ASX: CBA) Share Price, Dividend and Stock Forecast

Commonwealth Bank of Australia (ASX: CBA) is still the heavyweight of the ASX banking sector, but its share price halo has slipped in 2025. After a year of record profits, generous dividends and now‑fading interest‑rate‑cut hopes, investors are asking a simple question with a complicated answer: is CBA still worth its premium price tag?

Below is a deep dive into CBA’s share price today, the latest news, analyst forecasts and key risks as at 8 December 2025.

CBA share price today: modest bounce after a rough November

On 8 December 2025, Commonwealth Bank shares were trading around A$154–155, with Investing.com showing an intraday price of roughly A$154.40 and recent trading data indicating a close of A$154.99, up about 0.5% on the day. ^[1]

A daily market wrap from The Inside Adviser noted that Australian banks were broadly higher in Monday’s session, including Commonwealth Bank and Westpac, as the market steadied ahead of the Reserve Bank of Australia’s final interest rate decision of the year. ^[2]

Zoom out a bit and the picture is more bruised:

CBA shares fell sharply in November, with several commentators pointing out that the stock dropped around 11% for the month, underperforming peers like National Australia Bank. ^[3]
Earlier in the year, the stock traded near A$170, so today’s price in the mid‑A$150s represents a noticeable de‑rating from the peak, even though CBA is still trading well above late‑2024 levels (when the stock was closer to A$120–130).

Adding a bit of theatre, BHP Group surged about 8% today and is “on its way to reclaiming the ASX 200’s No.1 spot from CBA”, according to a report from The Motley Fool – a neat symbol of investors rotating from pricey banks into resources. ^[4]

CBA is still a giant, but the market is no longer treating it as bulletproof.

From record FY25 profit to a Q1 wobble

FY25: numbers that should make a bank CEO very happy

On 13 August 2025, Commonwealth Bank reported record full‑year cash earnings of A$10.25 billion, up about 4% on the prior year, and statutory NPAT of A$10.13 billion. ^[5]

Key FY25 highlights from CBA’s own results hub and investor materials:

Cash NPAT: A$10.25 billion, +4% year‑on‑year.
Dividend:
- Final dividend: A$2.60 per share (fully franked).
- Total FY25 dividend: A$4.85 per share, up 4%, with a payout ratio around 79% of cash NPAT – the upper end of the bank’s target range. ^[6]
Net interest margin (NIM): approximately 2.08%, up 9 basis points on FY24 as higher earnings on capital and hedges offset deposit competition. ^[7]
Capital:
- CET1 ratio: about 12.3% (APRA Level 2) – comfortably above APRA’s minimum requirement of 10.25%. ^[8]
- Ongoing A$1 billion on‑market buy‑back, with roughly A$300m completed by June 2025. ^[9]
Credit quality:
- Loan loss rate: roughly 7 basis points, down 9% on FY24.
- Provision coverage still strong, with about A$2.6 billion of buffer relative to the bank’s central economic scenario. ^[10]

So far, so golden. But the market is less sentimental than a results presentation.

Investor reaction: “great bank, very expensive stock”

On the day of the FY25 result, Reuters reported that despite these record numbers, investors “dumped” the stock, sending CBA shares down about 5% to a three‑month low. The problem? Valuation. ^[11]

According to that same report:

CBA was trading at roughly 30× earnings and a price‑to‑book ratio more than triple the industry median, making it one of the most expensive banks in the world.
Portfolio managers at firms like Martin Currie and Blackwattle publicly argued that CBA’s valuation premium had become disconnected from the growth and return profile delivered in the result. ^[12]

The theme hasn’t changed since: fundamentally strong bank, crowded and expensive stock.

Q1 FY26 trading update: margins and costs bite

On 11 November 2025, CBA released its September‑quarter trading update. Headlines:

Q1 cash profit: about A$2.6 billion, up 2% year‑on‑year and 1% above the average of the prior two quarters.
Volume growth:
- Home lending up around A$9.3 billion in the quarter.
- Household deposits up A$17.8 billion. ^[13]
Net interest margin: directionally lower, pressured by deposit switching into higher‑yielding accounts, intense competition and a lower cash‑rate environment.
Operating expenses: up roughly 4%, driven by wage inflation and technology investment. ^[14]
Credit quality: still solid, with overdue home loans at just 0.66% of the portfolio and a A$220 million provision for potential credit losses (about 9 bps of the loan book). ^[15]

Despite the respectable profit, CBA’s shares fell as much as 5% on the day. Reuters again highlighted that the stock remained one of the priciest banks globally, with valuation metrics more than double global averages. ^[16]

The Bull’s “18 Share Tips” column on 1 December captured market unease, noting that the Q1 FY26 update led to CBA’s worst single‑day share price fall in four years, as investors digested weaker margins, higher costs and a slightly lower‑than‑expected CET1 ratio of 11.8% (still well above APRA’s minimum). ^[17]

Rates outlook: CBA economists now expect no cuts in 2026

Bank share valuations live and die on interest‑rate expectations, and the ground has shifted again in December.

On 8 December 2025, realestate.com.au reported that ANZ had reversed its call on the RBA and now joined Commonwealth Bank and NAB in forecasting no further cash‑rate cuts in this cycle. All three big banks now expect the RBA cash rate to stay on hold through 2026, while Westpac remains the outlier, still pencilling in two cuts in May and August 2026. ^[18]

At the same time, a Bloomberg piece previewing the 8–9 December RBA meeting noted:

The market expects the RBA to hold the cash rate at 3.6% for a third straight meeting.
Interest‑rate swaps are already pricing a possible pivot back to tightening around mid‑2026 if inflation proves sticky and demand stays resilient. ^[19]

What does that mean for CBA?

Margins: A lower‑for‑longer cash rate generally compresses NIM as deposit competition intensifies. That’s already visible in the Q1 update. ^[20]
Credit quality: Steady rates at 3.6% (rather than sinking toward zero) are less likely to ignite a reckless borrowing binge, but they also mean heavily indebted households won’t get the repayment relief many were hoping for.
Valuation narrative: CBA’s premium multiple has long been justified on the idea that it is a “safer, compounding franchise” in a structurally profitable banking system. Higher‑for‑longer real rates and regulatory tweaks test how much investors are willing to pay for that story.

Capital and regulation: APRA’s AT1 shake‑up

The other big 2025 plot twist for Australian banks is regulatory, not economic.

In early December, the Australian Prudential Regulation Authority (APRA) finalised its framework to remove Additional Tier 1 (AT1) capital instruments – the hybrid securities beloved by many retail income investors – from the bank capital stack. ^[21]

Key points from APRA and the Reserve Bank of Australia (RBA):

The new framework takes effect from 1 January 2027, with existing AT1 capital instruments phased out by 2032. ^[22]
Large, internationally active banks (that’s CBA) can replace 1.5% of risk‑weighted assets in AT1 with 1.25% in Tier 2 and 0.25% in CET1, effectively nudging them toward a slightly higher “pure equity” base. ^[23]
The RBA’s October 2025 Financial Stability Review notes that replacing AT1 with more reliable forms of capital is designed to improve the effectiveness of bank capital in a crisis, not to signal systemic weakness. ^[24]

A separate industry analysis estimated there is roughly A$44 billion of AT1 hybrids to be transitioned across the Australian banking system by 2032, but described the shift as manageable, given the long runway. ^[25]

For CBA specifically:

The bank is starting from a CET1 ratio of 12.3%, already well above APRA’s 10.25% minimum. ^[26]
It has strong internal capital generation, a flexible dividend payout policy (even if currently at the high end) and ongoing buy‑backs it can dial up or down.

Net effect: APRA’s AT1 move is a slow‑burn structural issue, not a short‑term threat to CBA’s solvency. But it does put a subtle ceiling on how aggressively management can return capital if earnings growth slows.

Valuation and dividend: premium quality at a premium price

Using Market Index’s latest data:

Earnings per share (EPS, TTM): about A$6.05.
Dividend per share (TTM):A$4.85, fully franked. ^[27]

At today’s share price around A$154–155:

Trailing P/E is roughly 25–26× earnings (A$154.4 ÷ A$6.05 ≈ 25.5).
Trailing dividend yield is about 3.1%, before gross‑up for franking credits (A$4.85 ÷ A$154.4 ≈ 3.1%).

Those numbers line up with The Bull’s Medallion Financial analyst, who recently described CBA as trading on “about 25 times” earnings with a roughly 3.15% yield, warning that this sits well above global peers. ^[28]

Higher multiples aren’t automatically bad; they just demand either faster growth or exceptional resilience. The tension in CBA today is that:

Profit growth is positive but modest (cash NPAT +4% in FY25). ^[29]
Margins are under pressure, and management is spending more on technology, wages and risk management. ^[30]
Regulators are nudging banks toward slightly thicker equity buffers, which is good for safety but mechanically drags on return on equity.

In other words: CBA still looks like a high‑quality, fully‑priced bond proxy with growth options, rather than a classic value play.

What are analysts saying about CBA shares?

Goldman Sachs: “Sell” with ~16% downside

Goldman Sachs initiated coverage on Commonwealth Bank in October with a Sell rating and a price target of A$130.18. ^[31]

Their key arguments, as summarised by Investing.com:

CBA’s share price rally over the past 18–24 months has been driven almost entirely by multiple expansion, with the P/E stretching to around 28×, rather than by explosive earnings growth.
They see CBA’s earnings profile as “broadly flat” over the forecast period, with their EPS forecasts 1–4% below consensus. ^[32]
The team expects the bank’s significant P/E premium to domestic peers, global developed‑market banks and other Australian large caps to narrow over time.
They also note that investors are already rotating into better‑performing materials and industrial stocks – exactly the dynamic we saw today with BHP’s 8% jump. ^[33]

With the stock around A$154, Goldman’s A$130.18 target implies roughly 15–16% downside, before dividends.

Local brokers: “great business, limited upside”

The Bull’s 1 December survey of Australian advisers paints a similar picture, but with more nuance: ^[34]

Stuart Bromley (Medallion Financial Group) – SELL
- Calls CBA a solid franchise but says the share price is too expensive at ~25× earnings and a 3.15% yield.
- Highlights the recent worst four‑year sell‑off after Q1 FY26 results, with weaker NIM, higher costs and a CET1 ratio of 11.8% (still above APRA’s 10.25%).
John Athanasiou (Red Leaf Securities) – HOLD
- Describes CBA as a “high quality, profitable bank with strong capital ratios and a solid dividend”, providing stability in a competitive sector.
- But he warns that upside is limited by expensive valuation, margin pressure, elevated household debt and a cooling housing market.

The common thread: almost nobody disputes the quality of the bank, but plenty of people question the price of the shares.

Overseas views: ADR price targets

For US investors holding CBA via the CMWAY ADR, MarketBeat data shows an average 12‑month price target of $130.18, implying about 27.6% upside from a current ADR price around $102. However, that figure is based on just two analysts – essentially the same Goldman target transposed into the ADR framework – so it should be treated very cautiously. ^[35]

Short‑term trading models

On the more quantitative side, StockInvest’s short‑term model suggested a “fair opening price” of A$153.45 for 8 December 2025, only about 0.5% away from where the stock actually traded. ^[36]

That’s a nice reminder that in the very short run, random noise and sentiment can easily overwhelm fundamental valuation debates.

Key risks and opportunities heading into 2026

Upside drivers

Still‑strong franchise economics
CBA retains dominant positions in Australian retail banking and a sizeable slice of business banking, with FY25 lending volumes growing faster than system in several segments and a stable NIM over the full year. ^[37]
Healthy balance sheet and capital
A CET1 ratio north of 12%, strong deposit funding (around 78% of total funding) and low loan‑loss rates give management room to keep paying healthy dividends and, if conditions allow, resume or extend buy‑backs. ^[38]
Housing market resilience
CBA’s own economics team has recently highlighted continued strength in Australian home prices, which supports collateral values on its A$2.2 trillion mortgage market exposure (CBA underwrites about a quarter of that market). ^[39]
Defensive appeal
In a shaky macro environment, a large, well‑capitalised, highly profitable bank with fully franked dividends often looks attractive to income‑seeking investors, even at a premium.

Downside risks

Valuation compression
Global banks typically trade on high‑single‑ to low‑double‑digit P/E multiples. CBA is in the mid‑20s, and was near 30× earlier in the year. Multiple compression alone – without any earnings disappointment – could shave a meaningful chunk off the share price, which is what both Goldman Sachs and several local brokers are effectively betting on. ^[40]
Margin pressure and competition
As the cash rate stabilises around 3.6% and other banks fight harder for deposits and mortgages, incremental earnings growth becomes harder to squeeze out of the balance sheet. CBA’s own Q1 update already showed NIM edging lower and costs rising. ^[41]
Regulatory overhang
APRA’s AT1 reforms are gradual but could still mean more Tier 2 issuance and higher CET1 over time, which can dilute returns on equity unless profits grow faster. ^[42]
Macro risks and household leverage
With CBA economists now expecting no further rate cuts through 2026, heavily indebted households may remain under pressure. A negative economic surprise – unemployment jumping, or inflation forcing the RBA into renewed hikes – could push arrears and loan losses higher from what are currently very benign levels. ^[43]

Bottom line: is CBA stock a buy, hold or sell at A$154–155?

Not investment advice, just the landscape:

The bull case is that CBA remains one of the highest‑quality bank franchises in the world, with strong capital, conservative risk management and reliable, fully‑franked dividends. If the Australian economy muddles through, earnings stay broadly stable and investors continue to prize “quality defensives”, CBA could justify a premium multiple and deliver mid‑single‑digit total returns over time.
The bear case is that much of that story is already in the price. At roughly 25–26× earnings and a ~3.1% cash yield, the stock is priced more like a high‑growth tech company than a mature bank facing margin pressure, regulatory changes and a heavily indebted customer base. If valuations normalise toward peers, even flat earnings could mean double‑digit downside from here – the scenario implied by Goldman’s A$130 target and several local “Sell” calls. ^[44]

The centre‑ground view from many Australian brokers right now is effectively: “Hold if you already own it, but don’t chase it higher.” That reflects the tension perfectly: CBA the bank still looks rock solid; CBA the stock just doesn’t look obviously cheap.

If you’re weighing what to do with CBA in your own portfolio, the crucial questions aren’t mystical:

How much valuation risk are you comfortable with in exchange for a relatively dependable dividend stream?
Do you believe CBA’s premium to global banks will persist over the next five years, or slowly fade?
And how concentrated do you want to be in a single company that still makes up around 12% of the Australian share market?

References

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BHP Group Ltd (ASX:BHP) Stock Hits 52‑Week High as Anglo Bid Fades and Samarco Risk Eases

Australian Stock Market Today: ASX 200 Softens as Miners Drag and Lithium Surges Ahead of RBA Decision (8 December 2025)

XRP Price Forecast for December 2025: Extreme Fear, $2 “Buy Zone” Hype and $12M Max‑Pain Level Collide

Commonwealth Bank of Australia (ASX: CBA) Share Price, Dividend and Stock Forecast – 8 December 2025