The Commonwealth Bank of Australia (ASX: CBA) share price has had a great month to date, rising by more than 17% (at the time of writing). Investors loved the FY26 half-year result that the ASX bank share revealed.
However, while the numbers were pleasing, not every analyst is impressed enough to think that Australia's biggest bank is a buy.
Let's take a look at what broker UBS thought of the result and the appeal of the bank's valuation.
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UBS commentary on the ASX bank share
The broker noted that the HY26 result beat both UBS' forecast and market expectations by about 5%. Loan growth helped deliver a good performance with "strong" net interest income, despite a weaker-than-expected net interest margin (NIM) (the profit margin on its lending, which includes the cost of funding the loans).
CBA achieved cash net profit after tax (NPAT) of $5.4 billion and declared an interim dividend per share of $2.35.
Underlying costs grew by 5.3% half over half, with a lower credit charge supporting 5% profit growth.
UBS highlighted a few different things in the result, with the business banking division being a "standout" with 8.7% growth half over half.
The broker also noted the growth in transactional deposits, particularly in retail banking (11.6%), because this widens CBA's economic moat in the retail market, supporting both the group net interest margin and net interest income.
UBS also said that CBA's mortgage business is in "full swing" with a record value of new business written in the half.
The stronger-than-anticipated lending growth is expected to "support cash NPAT growth in a stable asset quality and credit environment despite a fluid competitive backdrop".
Is the CBA share price attractive?
UBS has a sell rating on the ASX bank share, with a price target of $130, which implies a possible decline of more than 20% over the next year.
Despite the increase in earnings per share (EPS) estimates, UBS said that it finds the CBA share price valuation "challenging". The broker expects EPS to grow at a compound annual growth rate (CAGR) of around 4% in the next three years.
UBS noted that CBA is trading significantly above its historical price-to-book (P/B) ratio and price-to-earnings (P/E) ratio.
The broker now estimates that CBA could generate a net profit of $10.8 billion in the 2026 financial year and $11.1 billion in the 2027 financial year.
