Im amazed its got to a 25 earnings ratio. Can it really go to 30 times earnings? Apple is 32 times earnings but has doubled its net income over the past 5 years, therefore has a track record of outpacing GDP & population growth. CBA is so big and established it really can't grow beyond Australia's growth, so growth prospects are limited.
Since trading in 1991 there has been a general rule that CBA is a company that would trade around 15 times earnings. But the last couple of months has bucked that trend that has existed for over 30 years, and we have people willing to pay 25 to potentially 30 times earnings. A 70-100% premium to the historical consensus.............why
As I mentioned earlier, I think we have people who think CBA is a 'tech stock' and thus normal valuations don't apply.
CBA Price at posting:
$139.50 Sentiment: Sell Disclosure: Not Held
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