Before holders get mad, nothing said on here is going to really...

Before holders get mad, nothing said on here is going to really change the price of CBA, the largest mkt cap stock by a long way in Australia.

CBA is trading at some 21-22 times P/E. Of course its a very simplistic measure, but major banks typically trade around 6-10 in the US and CBA before COVID-19 in the last 5 years typically traded in a 12-17 P/E range (other Aussie banks nearer the upper end of that range at present). Crazy QE around the world changes those multiples of course. There is little alternative to investing in stocks and housing in the present silly interest rate environment, but with the Fed bringing forward its forecast interest rate increases to two in 2023 and the strong Aussie jobs report and lack of immigration, interest rates have gone up at the long end of the Aussie curve along with those globally since October 2020. I wouldn't expect to see CBA trade under 17 P/E in the next year (and recently rode the banks up on low COVID-19 valuations) but it does seem quite highly valued despite all of the unusual financials circumstances that abound at present.

Price to book value is just at the top of 5 year ranges, but that is obvsiouly not a great gauge in banks (the efficiency ratio a better measure in banks). Whilst CBA does have a higher lending margin than most Aussie banks (over 2%) and arguably better capital and provisioning position, I can't help feel CBA is looking a bit over-valued vs other Aussie banks and its historical range. TINA effect from QE/zero interest rates of course, but perhaps too many investors ploughing into CBA as a relatively less risky asset and of course wide expectations of a capital return or share buyback (Morgan Stanley calling $5billion with the next results).

Who cares if the big boys get hurt in any pull back, but on a retail investor website, there is some virtue to pointing out the very high historical valuation of CBA at present. CBA may well go higher, but retail investors need to be aware of the high valuation at least, if they are not already, before buying into CBA at these levels.

(I am short CBA for full disclosure, but thats more of a portfolio hedge in a historically higher valued stock, on what I see as a general global pullback on US tapering).