Commonwealth Bank of Australia (ASX: CBA) shares are once again outpacing the benchmark today.
Shares in the S&P/ASX 200 Index (ASX: XJO) bank stock closed yesterday trading for $166.74. In morning trade on Wednesday, shares are changing hands for $167.80 apiece, up 0.6%. That's well ahead of the 0.1% gain posted by the ASX 200 at this same time.
I say 'once again outpacing' as this outperformance has become par for the course for CBA shares.
Over the past 12 months, shares in Australia's biggest bank have gained 41.0%, smashing the 4.6% one-year gains posted by the ASX 200.
And that doesn't include the $4.75 in fully franked dividends eligible stockholders will have received over the year. If we add those back in, then the accumulated value of CommBank shares has soared 45.0% in 12 months.
Boom!
Are storm clouds forming for CBA shares?
No one can argue with the stellar returns CBA has delivered over the past year. And this from a venerable blue-chip stock, not some high-risk growth punt.
But casting his eyes to the horizon, Morgans' Damien Nguyen sees storm clouds building for CBA and its competitors (courtesy of The Bull).
"CBA is a quality bank, but it's trading at a significant premium to its peers," said Nguyen, who has a sell recommendation on CBA shares.
Indeed, CBA trades on a price-to-earnings (P/E) ratio of around 29 times.
That compares to a P/E ratio of around 14 times for ANZ Group Holdings Ltd (ASX: ANZ), approximately 16 times for National Australia Bank Ltd (ASX: NAB), and around 17 times for Westpac Banking Corp (ASX: WBC).
"While it delivers strong dividends and has a solid brand, it's facing the same macro risks as other banks," Nguyen said.
He named three headwinds that could bring CBA shares back to earth. Namely: rising bad debts, slowing credit growth, and margin pressure from interest rate changes.
"The high valuation leaves little room for upside and makes it vulnerable to any earnings disappointment," Nguyen said. "For investors who have enjoyed strong returns, it may be a good time to lock in gains and reduce exposure."
Foolish takeaway
Morgans' Nguyen is far from the only analyst forecasting a pullback in CBA shares. Though you shouldn't lose site of the fact that Australia's biggest bank has been trading a premium to its peers for years now. And to date, it's defied a host of broker sell recommendations.
We should get some clearer insight into just how the bank has been tracking next week. CBA is scheduled to release its quarterly update on 14 May.
