While cash profit (NPAT) before provisions (excluding remediation costs) was around 5% better than Morgans expectation, remediation costs largely offset any forecast upgrades. The bank is considered high quality though overvalued.
The broker highlights the net interest margin (NIM) and bad debt charge outcomes both appear to be better than consensus expectations.
Morgans increases cash EPS forecasts by 1.8% and 1.7% for FY22 and FY23 largely due to higher non-interest income forecasts. The Sell rating is unchanged and the target price increases to $73 from $72.
Target price is $73.00.Current Price is $95.65. Difference: ($22.65) – (brackets indicate current price is over target). If CBA meets the Morgans target it will return approximately -31% (excluding dividends, fees and charges – negative figures indicate an expected loss).