Over the past month, CSL Ltd (ASX: CSL) and Commonwealth Bank of Australia (ASX: CBA) shares have been heading in opposite directions.
Since 23 June, CSL has risen nearly 10%.
Meanwhile, since 25 June, CBA has fallen nearly 10%
Given consensus views on the two ASX 200 stocks during the first half of 2025, this is not a huge surprise.
CBA shares peaked at $192 in June.
Analysts and experts had repeatedly warned that CBA shares were significantly overvalued.
Meanwhile, most brokers had believed CSL was undervalued.
Those who swapped their CBA shares for CSL shares a month ago are likely to be happy with their decision today.
But, is this still the right call, or are these two ASX 200 stocks now fairly valued?
Comparing valuations
Based on expert commentary, swapping CSL shares for CBA shares appears to still be a sound move.
CBA shares could have a lot further to fall before they return to fair value.
CBA is still trading at a price-to-earnings (P/E) ratio of above 30. That's well above its historical range of between 12 and 17.
A recent article in The Australian Financial Review revealed that hedge fund Sage Capital had recently doubled down on its short position on CBA.
Broker Bell Potter also recently revealed that it is underweight on CBA shares on valuation grounds.
Macquarie has a price target of $105 on CBA shares. CBA closed yesterday at $172.42. This suggests the shares could still decline significantly further from here, despite being now down nearly 10% from their peak.
Meanwhile, brokers remain optimistic about CSL shares.
Macquarie has a price target of $347.50 on CSL. Yesterday, shares closed at $263.95. Therefore, despite rising nearly 10% this month, they remain undervalued according to the broker.
The broker cited the following factors that it believes will lead CSL's recovery:
Base business recovery, Behring margins improvement on track, contributions from new products, operational efficiencies, valuation appeal following share price rebasing.
Broker UBS also has a buy rating and price target of $310 on CSL shares.
Foolish Takeaway
CBA shares have corrected almost 10% in the past month, while CSL shares have risen nearly 10% over a similar timeframe.
Given this re-rating, investors may be wondering where to invest their money. Based on several expert valuations, CBA is still overvalued. This suggests that not every 'dip' is a buying opportunity.
The best time to swap CBA shares for CSL shares was a month ago. However, it's not too late to make this trade, based on the views of several leading experts.
