Top broker says 'we struggle to see CBA underperforming peers'. Here's why

How will CBA shares perform as rates rise? An expert weighs in.

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Key points
  • ASX bank shares are in the green today 
  • This follows a positive day on Wall Street 
  • One broker sees CBA stacking up well against its peers as interest rates rise  

Commonwealth Bank of Australia (ASX: CBA) shares are lifting today, and one analyst is optimistic about the big four bank's share price compared to its peers.

CBA shares are up 1.47% today and are currently trading at $99.57. For perspective, the S&P/ASX 200 Index (ASX: XJO) is rising 1.67% today.

Let's take a look at the outlook for CBA shares amid potentially higher interest rates.

A man in a suit smiles at the yellow piggy bank he holds in his hand.

Image source: Getty Images

CBA lifted to neutral

ASX bank shares are rising today following a positive night of trading on Wall street overnight. For example, Westpac Banking Corporation (ASX: WBC) is lifting 1.93%, Australia and New Zealand Banking Group Ltd (ASX: ANZ) is up 1.23%, and National Australia Bank Ltd (ASX: NAB) is climbing 1.63%.

This follows financial shares jumping on Wall Street overnight. The S&P 500 Index (SP: .INX) leapt 2.6% in the US on Thursday, while the Dow Jones Industrial Average Index (DJX: .DJI) jumped 2.83%.

Meanwhile, JP Morgan has upgraded its outlook for CBA shares to neutral. The broker is positive on CBA shares amid higher rates. In quotes cited by The Australian, the broker said:

….we struggle to see CBA underperforming peers meaningfully as it offers the best leverage to rising rates and has the most defensive loan book, in our view.

The Reserve Bank of Australia (RBA) raised the official cash rate by 0.25% in the first week of October. The bank is predicting "further increases" in the future.

CBA held its AGM on Wednesday. The company's chief executive Matt Comyn said: "Overall, we remain fundamentally optimistic about the medium to long-term opportunities for Australia."

CBA share price snapshot

The CBA share price has slid 2.4% in the past year, while it has lost 1.5% year to date.

For perspective, the ASX 200 has fallen nearly 8% in the past year and 9% in 2022.

CBA has a market capitalisation of nearly $169 billion based on the current share price

Motley Fool contributor Monica O'Shea 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 recommended Westpac Banking Corporation. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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