Following a broader market re-rating, Macquarie finds the bank sector looking increasingly attractive on a relative basis. The sector is offering healthy dividend yields and supportive relative valuations.
Nevertheless, the broker continues to find the current fundamental outlook challenging and retains forecasts that are below consensus.
Macquarie finds it difficult to have a more constructive view until external conditions improve. The broker downgrades Commonwealth Bank to Underperform from Neutral on a relative valuation basis. Target is $69.
Sector: Banks.
Target price is $69.00.Current Price is $72.04. Difference: ($3.04) – (brackets indicate current price is over target). If CBA meets the Macquarie target it will return approximately -4% (excluding dividends, fees and charges – negative figures indicate an expected loss).
