First Read: Commonwealth Bank of Australia "3Q26 Trading Update" (Sell) Storey

研报英文原文证据摘录

First Read: Commonwealth Bank of Australia "3Q26 Trading Update" (Sell) Storey

Forecast returns

Forecast price appreciation -24.2%

Forecast dividend yield 3.1%

Forecast stock return -21.2%

Market return assumption 9.8%

Forecast excess return -30.9%

Company Description

Commonwealth Bank of Australia (CBA) is one of the world's largest banks, with c.A$1.1trn

in assets. In addition to its core domestic brand, CBA owns and operates the BankWest brand

(acq. 2009), ASB in New Zealand and CommSec. Since APRA's inquiry in 2018, CBA has been

working to become a simpler bank, divesting its non-core portfolios across Asia and Australia.

The new strategic focus for CBA centres on 'building tomorrow's bank today'. Overall, CBA's

business is skewed towards retail mortgages (~26% share) and household deposits (28%),

while its share of business lending (17%) has decreased in recent years.

Valuation Method and Risk Statement

CBA is a large, highly leveraged financial institution operating across a number of markets

and as such is subject to the risk of changes in the general business and economic conditions

within these markets. A change in these conditions could include changes in interest rates,

inflation, unemployment, monetary supply, exogenous shock, changes in foreign exchange

rates, and the health of the general economy. CBA also faces the risk of regulatory changes

and increased competition which could affect the profitability of the group. A key risk that

financial institutions face is associated with extending credit to other parties. Less favourable

business conditions could cause potential losses from loans to increase putting pressure on

the group’s capital. CBA also faces operational risk from running such a large and complex

business.