It's no secret that Commonwealth Bank of Australia (ASX: CBA) shares have had a phenomenal three years. This ASX 200 bank and popular blue chip stock was under $100 a share back in September 2022. Today, those same shares are (at the time of writing) trading at $168.30 each, up a good 78% or so from where they were three years ago.
But of course, CBA has been far higher than the price we see today. The bank famously (or perhaps infamously) hit an all-time high of $192 a share back in June of this year, capping off an extraordinary run.
CBA shares have obviously cooled off significantly since then, thanks in some part to the full-year earnings report that we saw released last month.
As we covered at the time, these earrings were solid. CBA reported a 7% rise in statutory net profits after tax to $10.13 billion, as well as a 4% rise in cash net profit after tax to $10. 25 billion.
This enabled the bank to boost its 2025 final dividend by 4% to a record $2.60 per share, fully franked.
However, investors were clearly expecting more, given that the CBA share price has remained down by almost 6% since those earnings were released.
But let's talk about what the future might hold for CBA. So, where might this ASX 200 bank stock be in another three years' time?
Well, in my opinion, I think there's a reasonable chance that CBA stock is exactly where it is today in three years' time. It could even be a little lower.
That might seem a little far-fetched to some readers, but hear me out.
Where will CBA stock be in 2028?
Even after the recent falls, ASX experts are almost completely united in the view that CBA shares are woefully overvalued at their current level. We can see from the earnings numbers above that CBA is still growing, but at a slow-and-steady pace one would expect from such a large company.
Banks traditionally trade on earnings multiples of between 10 and 20. Yet CBA still sports a price-to-earnings (P/E) ratio of 27.8 today. That's a little bit higher than Google-owner Alphabet Inc (NASDAQ: GOOG)(NASDAQ: GOOGL) is currently being priced at. CommBank's next-closest rival on the ASX, Westpac Banking Corp (ASX: WBC), asks an earnings multiple of 19.78 today. And that's with Westpac close to its own all-time high.
Are investors seriously of the view that CBA and Alphabet share similar growth trajectories? They seem to be. But I don't see that happening. Neither do most experts. Last month, we looked at one expert's growth map for CBA, which forecasts modest, single-digit growth out to 2030.
As such, I think the most likely path forward for CBA stock is its share price treading water until its actual growth catches up to its share price. We've seen this before with CSL Ltd (ASX: CSL). CSL enjoyed blistering share price growth from 2015 to 2020. But its share price got too high, and the company has spent the past five years treading water. There's a strong case to be made that this is the fate that awaits CBA.
But that's just an educated guess. Let's see what happens with this high-flying bank stock going forward.
