Recently trading for $158.69 apiece, Commonwealth Bank of Australia (ASX: CBA) shares have fallen 6.1% over the past 12 months.
For some context, the S&P/ASX 200 Index (ASX: XJO) has gained 1.4% over this same period.
Though we shouldn't dismiss the two fully franked dividends the ASX 200 bank stock paid over the past year. CBA stock trades on a 3.2% fully franked trailing dividend yield.
But with economic headwinds brewing, Morgans' Damien Nguyen expects CBA could continue to underperform the benchmark in the months ahead (courtesy of The Bull).
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Should I sell CBA shares today?
"The CBA continues to deliver resilient earnings, strong capital levels and industry leading returns, reinforcing its position as Australia's premier banking franchise," Nguyen said.
He added:
However, the earnings growth outlook remains relatively modest as intense competition and margin pressure possibly weigh on profitability. Despite these headwinds, the stock trades at a significant premium to its peers and historical valuations.
Indeed, CBA shares trade on a price to earnings (P/E) ratio of around 24 times, the highest among the ASX 200 bank stocks.
Summarising his sell recommendation, Nguyen concluded, "With limited scope for earnings upgrades, we believe the share price leaves little room for disappointment."
ASX 200 stock in energy transition crosshairs
Atop his sell recommendation for CBA shares, Nguyen also recommends selling ASX 200 energy infrastructure company APA Group (ASX: APA).
"This energy infrastructure business provides investors with stable, regulated cash flows and a defensive earnings profile," he said.
"Total revenue was down 6.3% in full year 2026, but profit after tax was up 81.4%. Balance sheet leverage is significant, in our view, and funding costs can be a challenging headwind," Nguyen added.
Summarising his sell recommendation on APA Group shares, he concluded:
The market is concerned that the shift away from gas may create uncertainty about future demand in the longer term. Although APA is pursuing energy transition opportunities, we believe these are unlikely to materially improve earnings in the near term. We believe investors can find better risk-adjusted opportunities elsewhere.
Also bearish on CBA shares
Sanlam Private Wealth's Remo Greco also believes CommBank could be in for some growing headwinds (from The Bull).
"This leading Australian bank posted cash net profit after tax of $10.982 billion in full year 2026, up 7% on the prior corresponding period," he said. "Revenue from ordinary activities of $30.153 billion was up 7%."
As for his sell recommendation on CBA shares, Greco said:
Investors are concerned about slowing housing credit growth. Home loan applications fell about 15% since the federal budget in May and the company's full year result in August.
Mortgage competition remains elevated. Investors may want to consider cashing in some gains until a clearer picture emerges about the state of Australia's housing market, the outlook for interest rates and the broader outlook for credit growth moving forward.
