Commonwealth Bank of Australia (ASX: CBA) shares have long been one of the most popular investments on the ASX, and for good reason.
It is Australia's largest bank, one of the most profitable companies in the country, and a favourite among dividend investors.
But with its shares currently fetching $170.37, investors might be wondering how much a $10,000 investment could be worth by this time next year.
Let's take a closer look.
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A remarkable run
Over the past five years, CBA shares have been unstoppable and smashed the market.
During this time, they have delivered a total return of around 22.5% per annum, including dividends and capital gains.
If that performance were somehow repeated over the next year, a $10,000 investment would grow to approximately $12,250.
However, with its shares trading well above their historical average multiples and far higher than global peers, it seems unlikely that kind of return will be repeated in the short term. But never say never.
A more realistic outlook
Over the past decade, CBA shares have generated a total return of about 10.7% per annum on average. This is a touch ahead of the long term average for the share market.
If it managed to deliver a similar result again, a $10,000 investment today could be worth around $11,070 in a year's time.
That's still a solid outcome for a company of CBA's size and maturity, though investors should remember that past performance doesn't guarantee future returns.
In addition, CBA shares have been defying analyst expectations for years, consistently outperforming its peers and maintaining impressive profit margins. But eventually, even the strongest stocks tend to revert closer to their long-term growth rates.
What the experts are saying
Most brokers are convinced that the bank's shares will soon experience a sharp pullback
For example, Macquarie currently has an underperform rating and a $106.00 price target on CBA shares, implying almost 38% downside from current levels.
Meanwhile, Morgans has a sell rating and $100.85 price target on its shares, which suggests that downside of 40% is possible from current levels. This would turn a $10,000 investment into $6,000 if Morgans is accurate with its recommendation.
Foolish takeaway
CBA remains a world-class bank with an enviable balance sheet, premium brand, and consistent dividend stream.
But after an extraordinary run that's pushed its shares close to record highs, expectations may have outpaced reality.
For investors buying at today's price, strong returns are still possible if CBA continues to defy gravity, but there is also potential for sizeable declines too.
