Yesterday I covered the performance of the big four bank shares so far in 2025. Surprisingly, Commonwealth Bank of Australia (ASX: CBA) shares are now the worst performing of the four.
After such a red hot start to the year, CBA shares have faltered lately, including a 6% fall yesterday.
CBA shares have now shed almost 9% in the last week.
This has come on the back of the company's September first quarter update.
For the three months ended 30 September, CBA reported operating income growth of 3% and unaudited cash NPAT of ~$2.6 billion, up 1% on 2H25 quarterly average and 2% year-on-year.
The Motley Fool's James Mickleboro reported today that Macquarie is tipping a further 35% downside for the big four bank's shares.
The team at Morgans also has released updated guidance on Australia's largest bank following the results and shares a similar sentiment to Macquarie.
The team has downgraded its price target.
Here's what the broker had to say.
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CBA shares downgraded
The broker said Commonwealth Bank's revenue growth was outpaced by cost growth and loan impairment charges.
Morgans noted that while the market wasn't expecting much earnings growth (c.2% for 1H26, and we were more bullish than consensus), growth was weaker than these expectations.
The market's response to a mild earnings miss for a stock priced for perpetual perfection was today's (Tuesday's) sharp share price decline.
Consequently, Morgans has downgraded FY26-28F EPS and DPS by c.3%.
Reduced price target
The team at Morgans has lowered its discounted cash flow based target price to $96.07.
The team also has a sell rating on CBA shares, recommending clients aggressively reduce overweight positions given the risk of poor future investment returns arising from the even-now overvalued share price and low-to-mid single digit EPS/DPS growth outlook.
This reduced price target indicates a downside of 40.56%.
