Commonwealth Bank of Australia (ASX: CBA) shares have staged a strong comeback, rising around 10% over the past month.
This rally has firmly caught the market's attention.
After a weak start to 2026, Australia's largest bank is attracting buyers again.
The question now is whether that recovery has further to run.
As one of the largest companies on the ASX, every twist in CBA's share price makes headlines.
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Why CBA shares are rising again
CBA is one of the largest companies listed on the ASX.
The company dominates Australian retail banking, with a huge deposit base and a market-leading digital platform.
For much of early 2026, its shares were firmly out of favour with investors, and the stock hit a one-year-plus low of $147.22 back in January before the tide turned.
Since then, CBA shares have rebounded strongly to around $171.
Investors now appear willing to look past this year's housing and budget worries, and cooling fears around mortgage growth and negative gearing changes have helped usher in renewed optimism.
Recent earnings and the road ahead
The rebound has been supported by a solid profit performance.
CBA posted third-quarter cash profit of $2.7 billion, up 4% on the prior year. Lending and deposits both continued to grow despite a softer economy, and home loan funding remained strong, with around $45 billion written in the quarter.
The bank's capital position remains among the strongest in the sector.
CBA's next major update is its FY26 full-year result, due in August, a report that will be watched very closely.
Investors want firm proof that earnings can keep growing from here.
Guidance on net interest margins and bad debts will likely be in as much focus as the headline profit number.
What do the numbers say?
Even after this rally, the debate over CBA shares comes down to price.
The stock trades on roughly 26 times forecast FY26 earnings, which is a remarkable multiple for a mature, slow-growing bank.
It is also far above the ratings applied to rivals like Westpac and ANZ.
CBA recently paid a fully franked interim dividend of $2.35, for a trailing yield of around 3.0%. That yield is modest next to several of its big-four peers.
As such, for value-focused investors, CBA's valuation is the core of the problem.
Are CBA shares still a buy?
Brokers remain deeply cautious on the answer.
In one recent review, all eight analysts covering the stock rated it a sell, with an average price target implying downside of close to 30%.
The bull case rests on CBA's unmatched quality and its defensive, dividend-paying nature. On the flipside, the bear case points squarely at the stretched valuation.
Both views have real merit at today's price.
Much will depend on your own time horizon and your appetite for paying a premium.
Foolish takeaway
CBA shares have rallied hard, yet they remain expensive by almost any measure.
The business itself is arguably the highest-quality bank in the country, although the August FY26 result will be an important test for the company.
Income-focused investors can still find far higher yields elsewhere on the ASX, but quality-focused investors may appreciate CBA's reputation and track record of earnings growth.
As always, it pays to focus on the long term rather than the last month's move.
