Commonwealth Bank of Australia (ASX: CBA) shares have enjoyed a great rally so far this year. At the time of writing, the shares are up 0.4% to $178.91 a piece.
Today's uptick means CBA shares are now up 11% for the year to date and 6.5% higher than this time last year.
CBA shares spiked over 12% in 48 hours in mid-February after it posted an unexpectedly positive half-year FY26 result. Since then, the bank shares have remained in the spotlight but have been relatively stable.
But CBA shares are widely considered overvalued relative to its peers, and its bumper price tag isn't supported well by its business fundamentals.
CBA's price-to-earnings (P/E) ratio, at the time of writing, is 28.69. This is much higher (and therefore more expensive) than the other major big four Australian banks.
At the same time, the bank is facing ongoing net interest margin pressure from intense market competition and regulatory changes.
I think CBA shares are well overdue for a correction. And when that happens, we could even see the value crash below $100.
Here are two other ASX bank shares I'd rather own instead.
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Forget CBA shares, these are my ASX bank stock picks
Analysts are mostly bearish about ASX bank stocks, with some tipping significant downsides and value corrections ahead.
But there are two exceptions: Macquarie Group Ltd (ASX: MQG) and Judo Capital Holdings Ltd (ASX: JDO).
Macquarie is the fifth-largest ASX 200 bank by market capitalisation, and it is incredibly diversified. The bank does more than just banking; it also provides financial, advisory, investment, and fund management services across 34 markets globally.
That means it has exposure to commodities trading, infrastructure deals, asset management, and capital markets across multiple regions.
Unlike CBA, it isn't reliant on lending margins, and its diversity means that it can remain stable, or even benefit, when markets are going through periods of volatility.
The business is growing too. In February, the investment bank posted its third-quarter trading update for FY26, where it revealed the business has benefited from strong quarterly growth.
Then there is Australian-based Judo Bank, which provides financial services and lending to small and medium enterprises (SMEs) with annual turnovers of up to $100 million.
The bank was founded in 2016, received its banking license in 2019, and was listed on the ASX in 2021. So it's relatively new in comparison to majors like CBA.
Judo Bank has also had a strong start to FY26. At its latest AGM, it said lending momentum was strong over the first quarter and that it's confident it can achieve FY26 guidance of $180-$190 million. Guidance was confirmed again when it posted its first-half FY26 results in mid-February.
What do analysts expect for these ASX bank stocks?
Analysts are very bullish on both Macquarie and Judo shares over the next 12 months.
TradingView data shows most analysts (10 out of 15) have a buy or strong buy rating on Macquarie shares, with a maximum target price of $270. At the time of writing, Macquarie shares are trading at $138.60, implying a 13.2% upside.
Analysts are even more positive about Judo Bank shares. Out of 13, 12 have a buy or strong buy rating on the stock, and they forecast a maximum target price of $250. At the time of writing, Judo shares are trading at $1.49 each, which implies a huge 67% upside over the next 12 months.
