Commonwealth Bank of Australia (ASX: CBA) shares don't get a lot of love from analysts.
The general consensus is that they are expensive and don't deserve to trade at such a premium to the rest of the big four banks.
For this reason, according to CommSec, there is not a single broker with a buy rating on the shares of Australia's largest bank. In fact, it counts six brokers with strong sell ratings, five with moderate sell ratings, and three with hold ratings.
But it's not all doom and gloom. Despite only having a hold rating on CBA's shares, the team at Morgans has just named the bank as one of its best ideas for October.
Morgans describes its best ideas as follows:
Our best ideas are those that we think offer the highest risk-adjusted returns over a 12-month timeframe supported by a higher-than-average level of confidence. They are our most preferred sector exposures.
What is the broker saying about CBA shares?
According to the note, the broker believes there's a lot to like about CBA. It has the best performance metrics, the largest market share, leading technology, strong customer loyalty, and the lowest cost of capital.
And while its valuation and dividend yield isn't as attractive as other banks, that hasn't stopped it from naming CBA as a best idea. It commented:
We rate CBA a HOLD at current prices. As well as being Australia's largest bank, compared to its peers CBA has the highest ROE, lowest cost of capital, leading technology, largest position in the low risk residential mortgage market and largest low cost deposit base, and a loyal retail investor and customer base. However, investors pay for this quality via the highest earnings and asset-based multiples and lowest dividend yield amongst its peer group.
