Commonwealth Bank of Australia (ASX: CBA) shares have tumbled further into the red in Tuesday's trade.
At the time of writing, the shares are down by around another 1% and changing hands at $153 each.
The latest decrease means the banking giant has now shed around 12% since it posted its FY26 results in mid-August. The shares are also now down around 5% year to date and 9% lower than 12 months ago.
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Why are CBA shares still falling?
It's been a tough month for ASX bank shares across the board as investor confidence continues to take a beating.
Growing concerns about higher-than-expected inflation, the prospect of further interest rate hikes, and fears of a rising cost of living have led many investors to shy away from ASX shares recently.
And all this came against a backdrop of falling mortgage demand, a weakening housing market, and tight competition squeezing margins.
The bank's FY26 results, which it posted in mid-August, didn't help spark investor confidence.
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.
On a positive note, CBA 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. This raised concerns about the bank's earnings strength and its already-high valuation amid a weakening market.
Now the question is, are CBA shares approaching the bottom? Or is there more downside ahead?
Are the shares a buy, sell or hold now?
CBA shares have finally made their long-awaited correction, but I don't think the end is in sight yet.
Market Index data shows all brokers still have a strong sell rating on the shares. The $125.20 average target price implies the shares could fall another 19% 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 16% downside, and the minimum $90 suggests the shares could fall another 41%, at the time of writing.
Shaw and Partners has named the Big Four bank as an ASX share to sell this week. The broker highlights that CBA shares continue to trade at a significant premium to peers despite its subdued earnings growth outlook and warns that there is limited scope for further earnings-driven upside.
Medallion Financial Group's Stuart Bromley also has a sell recommendation on CBA shares. He agrees that the bank's valuation is strengthened and that better valuation opportunities exist elsewhere.
