In what's been a tumultuous year on the S&P/ASX 200 Index (ASX: XJO) so far, Commonwealth Bank of Australia (ASX: CBA) shares have been strong performers.
Despite closing down 0.9% at $173.46 apiece on Wednesday, shares in the ASX 200 bank stock have gained 7.7% in 2026. That's well ahead of the 0.5% year to date gains posted by the benchmark index.
And that's not including the $2.35 a share fully franked interim dividend CBA paid to eligible stockholders on 30 March.
If we add that back in, then the cumulative gains for CBA shares in 2026 come to 9.1%, with some potential tax benefits from those franking credits.
But after five years of outperformance from Australia's biggest bank, Catapult Wealth's Dylan Evans believes now could be an opportune time for investors to take profits (courtesy of The Bull).
Image source: Getty Images
Time to sell CBA shares?
"CBA is a high-quality company, with a strong management team and consistent track record," Evans noted.
"However, in our view, the bank was recently trading on a lofty price-earnings ratio well above its long-term average and that of its competitors," he added.
Indeed, CBA shares currently trade on a P/E ratio of around 29 times.
As for its chief competitors, Westpac Banking Corp (ASX: WBC) trades on a P/E ratio of around 20 times; ANZ Group Holdings Ltd (ASX: ANZ) trades on a P/E ratio of around 19 times; and National Australia Bank Ltd (ASX: NAB) trades on a P/E ratio of around 19 times.
According to Evans:
This multiple expansion has driven much of CBA's share price outperformance in the past five years. However, the company's high multiple is supported by only single digit growth and a recent modest dividend yield below 3% on April 16.
Evans concluded, "We believe the company is overvalued."
What's the latest from the ASX 200 bank stock?
CBA reported its half-year results (H1 FY 2026) on 11 February.
And it was another profitable six months for the big four bank, with CBA reporting a cash net profit after tax (NPAT) of $5.45 billion, up 6% year on year.
"Customer outcomes remain central to our approach. We have continued to invest in technology and frontline teams to improve customer experiences," CommBank CEO Matt Comyn said.
He added:
We continue to watch the competitive intensity and its implications across the financial system. We are well placed to compete effectively and will continue to adjust our settings as appropriate.
CBA shares closed up 6.8% on the day of the results release.
