Market Analysis: Goldman Sachs Predicts Decline in Commonwealth Bank Share Price

analysis of Commonwealth Bank share monetary_value by Goldman Sachs

Goldman Sachs recently publish a warning to investor see the share of Commonwealth Bank of Australia ( ASX : CBA ) . Despite the incredible 40 % rise in CBA share over the past 12 calendar_month , the agent belief that caution is justify . The outperformance of CBA share has been impute to assorted factor , with fundamental driver accounting for lupus_erythematosus than one - one-third of this growth .

factor drive CBA share Price

Goldman Sachs note that the growth in book value per share , dividend per share , and the relative monetary_value - to - book multiple have all lend to the rise in CBA share . However , the key reason for the outperformance , harmonize to Goldman , is the market pricing in a lower_berth imply cost of equity for CBA compare to its peer . This lower_berth cost of equity is something that the agent discovery difficult to justify , especially when see the relative fundamentals of the bank.

Despite the impressive performance of CBA share , Goldman Sachs repeat its sell evaluation on the stock with an update monetary_value target of 00.35 . This target represent a potential downside of 30 % from the current share monetary_value of 42.96 . The agent belief that even if cost of equity premise stay unchanged , the tax_return on CBA share may not justify an investing in the current market climate.

market analysis and Recommendations

Goldman Sachs ' analysis of CBA share raise question about the sustainability of the current share monetary_value degree . The agent 's appraisal of the bank 's performance propose that investor may be overvalue CBA share , lead to potential downside hazard in the future . With the market pricing in a lower_berth cost of equity for CBA compare to its peer , there are concern about the justification for this evaluation .

In decision , while CBA share have perform exceptionally well in the past year , investor are rede to continue with caution . Goldman Sachs ' sell evaluation and revise monetary_value target highlight the potential hazard associate with investing in CBA share at their current degree . As the market continue to evolve , it will be interest to see how CBA share menu in the approach calendar_month and whether the agent 's prediction prove to be accurate.