Commonwealth Bank of Australia (ASX: CBA) shares have slumped further into the red in Wednesday lunchtime trade.
At the time of writing, the ASX bank stock is down around 1% for the day, and trading at $158.22 a piece.
The shares have now fallen around 12% over the past month, and are down roughly 2% for the year-to-date.
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Why are CBA shares falling?
August was a rough month for ASX bank shares, with sharp declines reversing many gains made earlier this year.
Investor sentiment turned negative amid concerns about falling mortgage demand, a weakening housing market, and tight competition squeezing margins.
Later in the month, inflation data also came in much higher than expected, and sent the market into a frenzy. The update has prompted several major banks to revise their interest rate forecast to another hike as early as September.
The bank posted its FY26 results in mid-August, which also contributed to the falling share price.
CBA posted a 7% increase in cash NPAT and an 8% increase in statutory NPAT. Operating income also increased by 6.2%. The bank announced a $ 2.70-per-share fully-franked final dividend and a fully-franked full-year dividend of $5.05, up 20 cents.
The bank said it is the first time it has reported growth at or above system in each of its five core domestic product categories: home lending, business lending, consumer finance, household deposits, and business deposits.
But going forward, CBA flagged a cautious outlook, with softer household spending and slower economic growth.
The result was positive overall, but it raised concerns about the bank's earnings strength and its already-high valuation against a backdrop of a weakening housing market.
I think the latest update, and other market fundamentals suggest that the CBA share price rally is finally over, and that we will make corrections over coming months.
JHer's what the experts think.
What do brokers tip for the ASX bank stock now?
CBA shares may have fallen sharply over the month, but according to the experts there could be a lot more downside ahead.
Market Index data shows brokers still have a strong sell rating on the shares. The $125.10 average target price implies the shares could fall another 21% over the next 12 months, at the time of writing.
On TradingView data, the majority (14 out of 16) have a sell/strong sell rating on CBA. The average $127.86 target price implies a potential 20% downside, and the minimum $90 suggests the shares could fall another 43%, at the time of writing.
Damien Nguyen from Morgans has a sell rating on CBA shares and thinks the bank could continue to underperform the benchmark in the months ahead.
Remo Greco from Sanlam Private Wealth also has a sell recommendation on the shares and also believes CommBank could be in for some growing headwinds.
