Commonwealth Bank shares are facing downward pressure following the release of its September quarter update, according to IG market analyst Tony Sycamore. The stock experienced a 3.7 per cent decrease, trading at $168.52 after hitting an intraday low of $166.31. Commonwealth Bank is a financial institution providing a range of banking and financial services to individuals, businesses, and institutions. It operates both domestically and internationally.
Sycamore noted that while the results generally aligned with expectations, investor sentiment is being negatively impacted by concerns regarding net interest margin contraction, unspecified cost pressures, and a competitive market environment. These factors appear to be overshadowing the broadly expected results.
Despite a recent pullback from a $192 high in late June, Sycamore suggests that CBA’s shares are still considered expensive based on certain valuation metrics. This valuation concern may be contributing to the current market reaction to the quarterly update.
The bank’s shares have remained relatively stagnant to slightly lower over the last three months. This follows a 5.41 per cent drop to $169.12 after its full-year earnings announcement in mid-August, which had also disappointed investors at the time.
