It is overvalued, doesn't mean people are not allowed to buy it
Below is the EPS over a 10 year period. EPS with 557.8 is the 30/6/24 result. The 528.73 result is 30 June 2015.
Its very consistent with earnings but also not much an earnings grower. Its trading now at 25 times earnings and has modest growth prospects. I could understand if over the next 5 years EPS could compound at 10% YoY. But CBA wont come close to doing that. Expectations are earnings might not grow for another two years, and that next year's earning will dip.
If it can pop 20% in 6 months, it can unwind as much in under half that time. As even still $120 a share multiple would be 21 - which is still considerably higher than its historical earnings multiple
CBA Price at posting:
$142.06 Sentiment: Sell Disclosure: Not Held
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