CBA – Macquarie rates the stock as Underperform

The broker has responded to the Commonwealth bank result with a series of charts. It is unclear how the result stacked up against forecasts. Macquarie acknowledges a beat on net interest margin but expects margins to moderate given deposit rate headwinds from a lower RBA cash rate. Expenses continued to rise despite the bank guiding to lower expenses this time last year.

The positive is a capital position strong enough to support capital management initiatives. Target falls to $72.50 from $75.00 on downgraded earnings forecasts. Underperform retained. Looks rather like a “miss”.

Sector: Banks.

Target price is $72.50.Current Price is $88.24. Difference: ($15.74) – (brackets indicate current price is over target). If CBA meets the Macquarie target it will return approximately -22% (excluding dividends, fees and charges – negative figures indicate an expected loss).

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