Commonwealth Bank of Australia (ASX: CBA) shares have started the week in the red.
At the time of writing, the banking giant's shares are down over 0.5% to $99.47.
This means the shares of Australia's largest bank have pulled back almost 11% from their 52-week high.
Are CBA shares good value?
According to a recent note out of Citi, its analysts believe that the bank's shares are still expensive at this level.
In fact, the broker believes there is significant downside risk for investors picking them up at current prices.
The note reveals that the broker has a sell rating and a $82.50 price target on CBA's shares. This implies a potential downside of 17% for investors over the next 12 months.
And while Citi is expecting an attractive 4.5% fully franked dividend yield in FY 2024, this doesn't change much on a total return basis. After factoring in dividends, the value of your investment would still fall by 12.5% if Citi is on the money with its recommendation.
What did Citi say?
In response to the broker's FY 2023 results, valuation, and outlook, its analysts said:
Overall, we thought the narrative of the result was focused on the strength of the balance sheet, both in excess capital and surplus (& growing) provisions. While we don't disagree, we thought there was a lack of focus on the challenges facing core earnings, with revenue set to moderate (2H NIM declined despite rising rates, slowing volumes) and costs likely to be similarly high in FY24E. We forecast falling core earnings, which all else equal, is set to drive the P/E higher at the current valuation. We maintain our Sell recommendation, and think investors receive little compensation for equity risk at current levels.