Commonwealth Bank of Australia (ASX: CBA) shares are pushing higher today.
Shares in the S&P/ASX 200 Index (ASX: XJO) bank stock closed yesterday trading for $169.08. At the time of writing in afternoon trade on Wednesday, shares are changing hands for $169.95 apiece, up 0.5%.
That sees CommBank shares up 23.5% since this time last year. And that's not including the $4.85 a share in fully franked dividends Australia's largest bank paid (or shortly will pay) eligible shareholders over this period.
More recently however, CBA shares have been trending lower. After hitting an all-time closing high of $191.40 a share on 25 June, the ASX 200 bank stock is now down 11.2% from that high watermark.
Which brings us back to our headline question.
After the recent retrace, is CommBank stock now a good buy?
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CBA shares: Buy, hold, or sell?
Medallion Financial Group's Stuart Bromley recently ran his slide rule over the big four bank (courtesy of The Bull).
"The banking giant delivered a cash net profit after tax of $10.252 billion in fiscal year 2025, up 4% on the prior corresponding period," said Bromley, who has a sell recommendation on CBA shares.
"The shares have fallen from $191.40 on June 25 to trade at $173.80 on August 21," he said of the recent headwinds.
Despite that pullback, Bromley still has valuation concerns following the bank's strong share price outperformance over the past two years.
"We still view the business as overvalued, as it was recently trading on a price/earnings ratio above 28 times," he said of CBA's lofty P/E ratio.
For some like-for-like comparison, here's how that stacks up against the other big four Aussie bank stocks:
- ANZ Group Holdings Ltd (ASX: ANZ) shares trade on a P/E ratio of around 15 times
- National Australia Bank Ltd (ASX: NAB) shares trade on a P/E ratio of around 19 times
- Westpac Banking Corp (ASX: WBC) shares trade on a P/E ratio of around 20 times
Citing other potential hurdles ahead for CBA shares, Bromley concluded, "Falling interest rates typically compress net interest margins for banks. Rising costs are also expected to deliver headwinds."
CBA did not provide specific FY 2026 guidance when the company reported its FY 2025 results on 13 August.
But CommBank CEO Matt Comyn sounded an optimistic note. He said:
Despite global uncertainty, the Australian economy has remained resilient, with strong fundamentals including a healthy labour market, steady immigration and ongoing public sector investment. Even though sentiment remains subdued, we expect economic growth to improve modestly as the year progresses
CBA shares closed down 5.4% on the day.
