Commonwealth Bank of Australia (ASX: CBA) shares have climbed into the green on Wednesday morning.
At the time of writing, the ASX banking giant's share price is up around 1.5% and changing hands for $166.38.
The increase means the shares are now around 3% higher year to date but 11% lower than this time last year.
Now, many investors are questioning what to do with their CBA shares. Is this the beginning of the next rebound, or is it time to sell up before the end of FY26?
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What's next for CBA shares?
It's been the market consensus for some time that the banking giant's shares are overvalued relative to its peers. Its bumper price tag isn't supported by the bank's business fundamentals either.
Market Index data shows brokers still unanimously rate CBA's shares as a strong sell. They tip a potential downside of 25% to an average $123.20 12-month target price, at the time of writing.
TradingView data shows some analysts are even more bearish. Out of 16 analysts, 14 have a sell or strong sell rating on the stock. The other two have a hold rating.
The average $126.36 target price implies a potential 23% downside ahead, at the time of writing. But some think the shares could crash up to 45% to as little as $90 each over the next 12 months.
If analyst predictions are anything to go by, we can assume that the peak has well and truly passed for CBA shares.
But potential upsides and predicted share price targets aren't the only reasons investors should weigh up when thinking about what to do with their CBA shares.
CBA shares are a popular passive income play
CBA is a cyclical stock, but it has strong defensive qualities. Its large scale and market dominance mean it can be more resistant in times of economic crisis.
Scarcity of quality stocks on the ASX also means investors tend to put major players, like CBA, on a pedestal. Its sheer scale often means investors generally consider it a safe haven when markets are unstable.
We've seen this play out throughout 2026. Regardless of the business fundamentals and analyst outlooks, many investors will always favour and buy into CBA shares purely because it is Australia's largest bank.
The good news is that its huge scale has enabled the bank to generate a long history of paying regular fully-franked dividends every year, dating back to 1992.
And it pays its shareholders a good dividend, too. Its latest payment was a fully-franked interim dividend of $2.35 per share in late-March, implying a dividend yield of around 3% at the time of writing.
So, should I sell my CBA shares before the end of FY26?
If a quick return is what you're after, then you're invested in the wrong ASX stock. It looks like CBA shares are on the way down, and there isn't much visibility on when a turnaround will come.
If CBA shares crash as low as the experts predict, it'll also affect the level of passive income you'll earn.
But keep in mind that ASX bank stocks are cyclical by nature. That means they're highly sensitive to inflation and interest rates, but when the economy starts to rebound, they're among the first to recover.
