Commonwealth Bank of Australia (ASX: CBA) has been one of the top performing ASX 200 companies of 2021, with the CBA share price jumping more than 20% higher so far this year.
In light of this, investors will no doubt be interested to know where analysts think the CBA share price will be going next, among other things.
What are leading brokers saying about the CBA share price?
With the CBA share price currently fetching $99.35, many leading brokers believe it could have reached its peak for the time being.
For example, a recent note out of Citi reveals that its analysts have a neutral rating on CBA's shares. And the broker's CBA share price target of $95.00 implies potential downside of 4.4% over the next 12 months.
Citi is positive on Australia's largest bank and is expecting a significant share buyback in the near future. However, this isn't enough for a more positive rating on CBA shares.
The broker commented: "Given the rapid improvement in the domestic economic recovery above expectations, coupled with building excess capital, we have pulled forward our buyback assumptions. We have now incorporated a $5bn buyback in 1H22, which we expect will be announced at the FY21 results in August. The pull forward of our buyback assumption sees us upgrading FY22/23E EPS by ~2.5%. Our target price remains unchanged at $95."
In respect to the CBA dividend in 2021, Citi is forecasting a fully franked $3.50 per share dividend. Based on the current CBA share price, this will mean a 3.5% yield.
What else are brokers saying?
One leading broker that believes CBA shares are overvalued is Goldman Sachs. Its sell rating and CBA share price target of $80.26 suggests potential downside of ~19% over the next 12 months.
Although the broker acknowledges the strength of the bank, it doesn't believe it deserves to trade at such a premium.
In May, Goldman explained: "While CBA's balance sheet is strong, with a sector leading capital position and operationally superior performance on volume growth versus its major bank peers, we do not believe this justifies the 42% premium it is currently trading on versus peers (peers adjusted for ex-dividend; versus 16% 15-yr average)."
However, Goldman Sachs is more positive on the CBA dividend in 2021 than its peers. It is forecasting a fully franked $5.39 per share dividend. Based on the current CBA share price, this represents a 5.4% yield currently.
Another neutral broker
Another broker that believes CBA shares are a fully valued now is Credit Suisse. In May the broker retained its neutral rating and lifted its CBA share price target in line with Citi's to $95.00.
It believes that CBA's strong balance sheet could allow the company to undertake a $4 billion share buyback later this year. Credit Suisse also suspects that further buybacks could be coming in the years that follow. Nevertheless, it remains neutral for valuation reasons.
In respect to the CBA dividend in 2021, Credit Suisse has pencilled in a fully franked $3.35 per share dividend. This represents a 3.4% based on where CBA shares are trading this afternoon.
