Investors interested in Commonwealth Bank of Australia (ASX: CBA) shares may like to know how the ASX bank share's profit is predicted to perform in the coming years.
The market often focuses on a business' profit because that influences investors' expectations of its worth. Profit generation is also essential for passive income because it funds dividend payments.
The CBA profit has been under pressure in recent results due to the headwinds on profit margins amid a highly competitive environment.
Lenders have been competing more on price to try to win market share. The trend of borrowers utilising mortgage brokers has also made it a more even playing field between the large banks and smaller lenders – a national branch network doesn't provide the same advantage as it used to.
With that banking environment in mind, let's look at what profit and earnings per share (EPS) CBA is forecast to generate for investors.
First, FY25
While FY24 saw a profit reduction for the ASX bank share, the broker UBS forecasts an improvement in CBA's earnings in the 2025 financial year.
UBS suggests that FY25 revenue could rise to $27.8 billion, helping net profit increase to $10.1 billion. Owners of CBA shares are expected to see EPS of $5.99, according to the broker. This would put the CBA share price at 23x FY25's estimated earnings.
Currently, UBS has a sell rating on CBA shares with a price target of $110, implying a possible drop of close to 20% over the next year. The broker said in its latest note:
The stock in our opinion remains somewhat of a conundrum for investors, with a sizeable disconnect between expected profitability and market valuations. Technical factors might continue to distort this disparity further…CBA is trading at 2.6x Price / Book Value and Price to Earnings (2-yrs fwd) of ~22x, both above a +2 standard deviation level.
In other words, the ASX bank share is expensive and trading at a higher valuation multiple than it usually does.
Next, FY26
There is no certainty about what will happen next with the RBA interest rate. But hopefully, there will be at least one rate cut by the end of FY26. This may help struggling borrowers and increase overall demand for credit.
The broker UBS is expecting a slight increase in net profit (approximately $70 million) for CBA in the 2026 financial year to $10.17 billion.
In per-share terms, CBA is forecast to generate $6.03 of EPS, which would represent a rise of 0.7% year over year.
After that, FY27
The 2027 financial year may see an all-time best profit generation for owners of CBA shares if the bank achieves what UBS is predicting.
The broker is forecasting that CBA's net profit growth could accelerate, with a projected profit rise of 3.3% year over year to $10.5 billion. The EPS is predicted to rise by 3% to $6.21.
Finally, FY28
CBA's final year of this series of forecasts is predicted to be the best yet.
The bank is projected to see a 4.8% rise in net profit to $11 billion in FY28. That will be a huge profit number if it happens, bigger than the entire current market capitalisation of Medibank Private Ltd (ASX: MPL), which is approximately $10 billion today, according to the ASX.
CBA share owners are predicted to see an EPS of $6.50 in FY28. Even this higher profit generation would still put the CBA share price at around 21x FY28's estimated earnings. That doesn't seem good value to me, and I'm not expecting CBA shares to outperform the market over the next few years.
