Its held this high valuation for almost two months now. There seems to be a real tolerance for the low earnings & div yield & I cant fathom why. Its divergence from the ASX 200 is about 27% outperformance in the past year alone, even though the ASX 200 itself has had a healthy 20% rise. CBA has risen 47% in a year despite not recovering from an event that depressed the price such as GFC or COVID. The numbers are staggering and on so many metrics almost every other major ASX looks better than CBA from a growth/valuation perspective. People go on about it being a well capitalized bank & well run, but you think its the only bank in the world? You think JP Morgan isnt a well-run bank? Because the PE Ratio of JP Morgan is 12.5, making CBA twice as expensive at 25 times earnings.
This is a bubble. The willingness to value CBA at 25 times earnings is a sensational misprice & it will correct, sooner or later.
CBA Price at posting:
$142.09 Sentiment: Sell Disclosure: Not Held
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