After a weak finish to 2025 and a shaky start in 2026, Commonwealth Bank of Australia (ASX: CBA) shares have come charging back.
On 21 January, shares in the S&P/ASX 200 Index (ASX: XJO) bank stock closed at a one-year-plus low of $147.22.
Earlier this week, shares were changing hands for $165.90 apiece, putting the share price up 12.7% from those lows. For some context, the ASX 200 has gained 0.5% over this same period.
And we shouldn't forget the $2.35 a share fully franked interim dividend CBA paid eligible stock holders on 30 March. CBA shares trade on a 3.0% fully franked trailing dividend yield.
But following the past months' rebound, Medallion Financial Group's Stuart Bromley believes the big four bank stock will struggle to deliver ongoing outperformance (courtesy of The Bull).
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Should I buy CBA shares today?
"CBA remains one of Australia's premier financial institutions and has consistently demonstrated exceptional execution, profitability and balance sheet strength," Bromley said.
He added:
However, we believe the current valuation has become increasingly difficult to justify. The stock is trading at a significant premium to domestic and global banking peers despite relatively modest earnings growth expectations.
Digging into those valuations, CBA shares trade at a price to earnings (P/E) ratio of around 26 times.
As for CommBank's chief rivals, ANZ Group Holdings Ltd (ASX: ANZ) shares trade at a P/E ratio of around 18 times; Westpac Banking Corp (ASX: WBC) shares trade on a P/E ratio of around 17 times; and National Australia Bank Ltd (ASX: NAB) shares trade on a P/E ratio of around 19 times.
Summarising his sell recommendation on CBA shares, Bromley concluded, "We believe future returns are likely to be constrained by the elevated valuation. Better value opportunities exist elsewhere in the market."
Better ASX shares to buy?
Speaking of potentially better ASX investment opportunities, while Bromley recommends selling CBA shares, he issued a buy recommendation on ASX 200 integrated property group Goodman Group (ASX: GMG).
"GMG is a global industrial property group and data centre developer," Bromley said.
And he sounded a particularly bullish note on the company's growing shift towards those AI enabled data centres
According to Bromley:
Recent acquisitions and development activity have further strengthened the group's exposure to data centres, artificial intelligence infrastructure and cloud computing demand. Work in progress of $14.5 billion at March 31, 2026 is expected to increase to $18 billion by the end of June.
We believe the market is still undervaluing the long-term earnings potential of Goodman's data centre strategy.
