Commonwealth Bank of Australia (ASX: CBA) shares are down around 1% at the time of writing on Thursday morning, to $162.95 a piece.
It's been a shaky run for the ASX banking giant over the past 12 months, with its share price swinging wildly between $146.98 and $192.
CBA shares flew higher in early February after reporting a solid first-half FY26 result. The bank posted profit growth and confirmed continued strength in home lending.
But the major bank suffered a sharp correction in May. The biggest event was CBA's largest one-day share-price fall on record, dropping over 10% in a single session.
The drop came after CBA posted a disappointing third-quarter capital update, reporting flat operating income and a 1% decline in its unaudited cash NPAT.
The results spooked investors, who rushed to sell their shares.
The question everyone is asking now is: How low could the CBA share price go?
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What the experts think
Market Index data shows all brokers have a strong sell rating on the banking giant's shares, and they tip a 24% downside to an average target price of $124.20, at the time of writing.
TradingView data is similar. Out of a collection of 16 analysts, 14 have a sell or strong sell rating, and another two rate the bank stock as a hold. A $127.43 target price implies a 22% downside at the time of writing. However, some think the shares could drop another 45% to just $90 each.
Why are analysts so negative on CBA shares?
CBA shares are widely considered overpriced versus its ASX bank peers. Many believe the bank's bumper price tag isn't supported by its business fundamentals.
CBA's price-to-earnings (P/E) ratio, at the time of writing, is 26.22. 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 earnings pressures, with expectations that growth will be in the single digits going forward.
Everything points to CBA shares being well overdue for a correction.
Not as simple as it looks
Analysts are pretty negative about CBA shares and tip a strong downside ahead.
But yet, each time the bank's share price falls, it starts ticking back up.
If the outlook for CBA is so unimpressive, why are investors still buying its shares?
It looks like the banking giant's shares are supported by a flight to quality.
In unstable markets, investors often rotate into large companies with stable dividends and dominant market positions to mitigate volatility. And it looks like CBA is the safe-haven stock of choice for investors right now.
