Closer to 30 times earnings than 25. The forward ratios on Apple and Microsoft are nearing on CBA's current multiple. Our market is literally pricing CBA as a megacap American tech stock. One of the staples of companies like Apple and Microsoft - high ROE well above 20%, the ability to price their own products, sustained EPS growth over the long term, doesn't payout majority of dividends and retains earnings and compounds those earnings.
CBA has no pricing power; it is often forced into discounting prices due to competition and interest rate changes. Does modest ROE of around 13%, pays out majority of its dividends as it wouldn't know what to do with the excess cash. CBA's EPS growth has been static for the past decade.
The enthusiasm for our banks, but in particular CBA, is utterly manic. When the 'experts' say it makes no sense, they are right, this makes no sense. It not difficult to determine CBA is crazy overvalued. On a historical basis to its own divided yield and PE ratio, on a comparative basis to other developed banks. Even extreme excess gains over the broader index. On every level, the stock is overbought by monumental proportions.
CBA Price at posting:
$160.14 Sentiment: Sell Disclosure: Not Held
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