The Commonwealth Bank of Australia (ASX: CBA) share price is up 17% over the past month and one expert believes now could be the time for investors to start taking profits.
Shares in Australia's largest bank have been on a tear during October after starting the month at $90.70 apiece. At the time of writing, the CBA share price is $106.02.
But Medallion Financial Group private wealth advisor Stuart Bromley has given CBA shares a sell recommendation, as reported by The Bull. His reasons include the potential for Australian house prices to fall as well as slowing global economic activity as we adjust to the shocks of rising interest rates.
Bromley said:
In our view, the rising share price provides a profit-taking opportunity in a volatile share market. Australian residential property values are forecast to fall. The banking sector is up against potentially slowing economies here and overseas.
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Citi reckons Aussie housing market could fall 23 per cent
Analysts from Citi agree with Bromley's view that the Australian housing market is set to fall, as reported by The Australian this morning.
Citi expects house prices to fall by an average 23% from peak to trough, describing the Reserve Bank of Australia's hawkish monetary policy as "embark[ing] on its most aggressive tightening cycle in decades".
This comes amid the RBA's decision to lift interest rates by 0.25% yesterday, bringing the official cash rate to 2.85%.
Low valuations and strong upside could make for a buying opportunity
However, Citi arrived at a different conclusion to Bromley, naming a couple of ASX bank shares among its buy recommendations. It noted "investors should start to build positions now" in light of these companies potentially being snapped up at a bargain.
While Commonwealth Bank did not make the list, Citi analysts Josh Williamson and others in the article recommended eight companies. They were chosen due to their depressed valuations and "represent a solid upside", according to the analysts.
The companies are:
