What happened to the CBA (ASX:CBA) share price in November

CBA shares had a month to forget…

| More on:
Group of thoughtful business people with eyeglasses reading documents in the office.

Image source: Getty Images

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

The Commonwealth Bank of Australia (ASX: CBA) share price was out of form in November.

During the month, Australia's largest bank saw its shares tumble a disappointing 11%.

This compares to a loss of 0.9% by the S&P/ASX 200 Index (ASX: XJO).

What happened to the CBA share price in November?

Investors were selling down the CBA share price last month in response to the banking giant's first quarter update.

For the three months ended 30 September, the bank reported a 3% increase in operating income over the prior corresponding period but a 1% decline over the quarterly average during the second half of FY 2021.

But the main disappointment came from its net interest margin, which was considerably lower in the quarter. Management advised that this was driven by higher liquid asset balances, home loan price competition, switching to lower margin fixed rate loans, and the continued impact of a low interest rate environment.

This sparked fears that retail-focused banks could underperform in the near term, leading to many investors jumping ship.

Is this a buying opportunity?

While the broker community is overwhelmingly bearish on the CBA share price, there is one leading broker that remains positive.

That broker is Bell Potter. In response to its update, the broker retained its buy rating but trimmed its price target to $111.00.

Based on the current CBA share price, this implies potential upside of approximately 16% for investors over the next 12 months.

In addition, Bell Potter expects the bank's shares to provide a fully franked 4.2% dividend yield in FY 2022. Combined, this brings the total potential return to ~20%.

While its analysts were disappointed with CBA's result, they still see enough value to maintain their buy rating.

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

More on Share Market News

Man with rocket wings which have flames coming out of them.
Broker Notes

These ASX shares could rise 30% to 50% in 12 months

Big returns could be on the cards for owners of these shares according to analysts.

Read more »

View from below of a man with a shovel standing by a hole he has dug in the garden, with blue sky in the background.
Resources Shares

Here's why I'm steering clear of Core Lithium shares

Lithium has bottomed out over the past year, but here's why this is NOT the bargain stock to buy.

Read more »

A woman sits in a cafe wearing a polka dotted shirt and holding a latte in one hand while reading something on a laptop that is sitting on the table in front of her
Share Market News

Why these 4 ASX 200 shares grabbed the Motley Fool's headlines this week

From stellar earnings results to a multi-billion-dollar acquisition approval, these four ASX 200 shares made a big splash this week.

Read more »

A happy older couple relax in a hammock together as they think about enjoying life with a passive income stream.
Investing Strategies

I'd aim to turn a $20,000 savings account into $25,400 of passive income

It doesn't matter if you don't have a pile of cash to start investing. The important thing is to start.

Read more »

A businessman hugs his computer and smiles.

3 ASX shares to buy and hold forever

I like these stocks as ultra-long term ideas.

Read more »

A man with grahpics of robot arms, indicating a share price movement in ASX robotics and tech companies
Share Market News

Here's how the ASX 200 market sectors stacked up this week

Tech shares led the pack for a second week, clocking a near 10% gain over the fortnight.

Read more »

A beautiful ocean vista is shown with a woman whose back is to the camera holding her arms up in triumph as she stands at the top of a rock feeling thrilled that ASX 200 shares are reaching multi-year high prices today
Share Gainers

Here are the top 10 ASX 200 shares today

The ASX had a very pleasant end to the trading week this Friday.

Read more »

A woman holds her hand out under a graphic hologram image of a human brain with brightly lit segments and section points.
Share Gainers

The Brainchip share price is up 213% this month. Is Nvidia to blame?

The small cap Aussie tech stock is going bananas in 2024.

Read more »