Commonwealth Bank reported cash earnings of $3,886m, down -11% versus last year but above Credit Suisse’s estimate of $3,513m.
The broker finds the bank’s first-half result to be one of the most conservative in recent times set against an operating back-drop that is far better than 6-9 months ago.
Also, despite management’s cautious stance, the broker believes it is only a matter of time before material releases and capital management bolster earnings.
Looking at the current valuation, Credit Suisse decides to maintain its Neutral rating and increase its target price to $85 from $82.
Sector: Banks.
Target price is $85.00.Current Price is $86.12. Difference: ($1.12) – (brackets indicate current price is over target). If CBA meets the Credit Suisse target it will return approximately -1% (excluding dividends, fees and charges – negative figures indicate an expected loss).
