remains under Algo Engine sell conditions and the only Australian Bank in our model is Westpac. Commonwealth Bank of
CBA trades almost 20x forward earnings which is a 30%+ premium to the other major banks.
Our deep value recovery play is the BNKS ETF which captures a broader global exposure.
remains under Algo Engine sell conditions and we see resistance building near the $74 price level. Commonwealth Bank of
CBA reports FY20 earnings on 12 August, at which time the market will focus on CBA’s dividend and any capital management commentary. Consensus expectations are for earnings to be $7.8bn, (down 10% on 2019 numbers), and the 2H20 dividend to be cut by 50%.
We remain on the short side of the CBA trade.
We remain cautious on the banks and feel the trough in the share price may be two to three months out from now, at which point a good long-term buy opportunity will be in place.
Short term we continue to watch CBA track below the downsloping resistance.
Australia – unaudited cash profit fell 23% in the three months ended March 31 to $1.3 billion from $1.7 billion in the year-earlier. Commonwealth Bank of
CBA has provisioned $1.5 billion for COVID-19 provisions.
The below graph provides a picture of the trend that short-term traders may be interested in.
Our short positions in
and Commonwealth Bank of have now switched to Algo Engine buy conditions and we can see approaching support levels in the charts. Computershare
CPU at $14 – cover short exposure
CBA at $77 – cover the short exposure.
Over the past month, we’ve focused on a handful of short positions.
, Commonwealth Bank of , Computershare , Perpetual and Platinum Asset Management . IRESS
We continue to see weakness across these names.
is priced for a strong result on February 12, so the potential for disappointment is high. The stock remains under Algo Engine sell conditions and despite the prospect of a $2.5bn on market share buy-back, we remain on the short side of the stock. Commonwealth Bank
CBA has re-rated to a P/E multiple of 17x and a dividend yield of 5%.
has announced FY19 cash earnings of $8,5bn, slightly below consensus estimates. The full-year dividend of $4.30 was in line with estimates and places the stock on a 5.1% yield. Commonwealth Bank of
Weak revenues were a clear issue with and FY20 headwinds on both revenues and costs will see downside pressure build for the CBA share price.
is under Algo Engine sell conditions and we’ll get insight into the earnings picture when the company reports their FY19 results on Wednesday 7th August. Commonwealth Bank of
We remain concerned about the declining profitability in retail banking.
With the stock trading on a 5% dividend yield, we expect to see buying support develop closer to the $75 price range.
Australia reported 3Q19 cash earnings of A$2.2bn, Commonwealth Bank of being below market consensus by 10%.
Analysts have downgraded FY19 earnings by 6%, (which incorporates the $500m post tax remediation charge), while FY20 and FY21 estimates are also lowered on weaker revenue numbers.
CBA currently trades 13x earnings on a 5.8% yield. A key risk for the business is an adverse turn in the credit cycle, which is not reflected in the current share price.
CBA has been under Algo Engine sell conditions following the lower high formation over the past 3 years.