January 30, 2025
Top 10 Stock Commonwealth Bank of Australia Hold Recommendation
How to read the ranks
For every stock, we judge its performance against its peers and rank it on a scale of 1 to 100. The higher the rank, the better the stock performs than its peers. And, we do this for six investment strategies:
Value - shows how good of a value the stock is. Green is "inexpensive"; red is "expensive".
Growth - shows a company's growth potential. Green is "high growth" expected; red is "tough times ahead".
Safety - relates to the amount of debt a company has. Green is low debt level; red is high debt level.
Combined Financial - this isn't an average of the first three ranks but rather a consolidated view across several financial indicators. Green = good; red = tread carefully.
(NEW) Sentiment - quantifies professional analyst ratings and holdings as well as market pulse. Green = positive sentiment; red = skepticism (Only available to Premium Subscribers).
(NEW) 360° View - the ultimate rating with all financial and non-financial indicators.
Snapshot: Commonwealth Bank of Australia – Top 10 Stock in Australian Securities Exchange Index ASX 50
Commonwealth Bank of Australia is listed as a top 10 stock on January 30, 2025 in the market index ASX 50 because of its high performance in at least one of the Obermatt investment strategies. Two consolidated Obermatt Ranks are above-average. While the company shows high growth, the stock price is high yet professional investor sentiment is low, which may be due to overly optimistic investor behavior, reflected in a low stock price value. Based on the Obermatt 360° View of 30 (30% performer), Obermatt assesses an overall hold recommendation for Commonwealth Bank of Australia on January 30, 2025.
Snapshot: Obermatt Ranks
| Country | Australia |
| Industry | Diversified Banks |
| Index | ASX 100, ASX 200, ASX 300, ASX 50, Human Rights, Renewables Users |
| Size class | XX-Large |
When Obermatt identifies the Top 10 stocks in a market, it’s based on a certain investment strategy. The best performing stocks usually aren’t the ones that everyone is talking about (those are often "over-priced" and have low Value ranks).
For each investment strategy, we provide you with more detailed analysis and our recommendation. You see the ranks of the top 10 stocks ranked by that particular investment strategy (360° View, Sentiment, Value, Growth, Safety and Combined Financial Performance).
360° View: Obermatt 360° View Commonwealth Bank of Australia Hold
| 360 METRICS | January 30, 2025 | |||||||
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| VALUE | ||||||||
| VALUE | 3 |
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| GROWTH | ||||||||
| GROWTH | 63 |
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| SAFETY | ||||||||
| SAFETY | 62 |
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| SENTIMENT | ||||||||
| SENTIMENT | 33 |
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| 360° VIEW | ||||||||
| 360° VIEW | 30 |
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ANALYSIS: With an Obermatt 360° View of 30 (better than 30% compared with alternatives), overall professional sentiment and financial characteristics for the stock Commonwealth Bank of Australia are below the industry average. The 360° View is based on consolidating four consolidated indicators, with half of the metrics below and half above average for Commonwealth Bank of Australia. The consolidated Growth Rank has a good rank of 63, which means that the company experiences above-average growth momentum when looking at financial metrics such as revenue, profit, and invested capital growth as well as stock returns. This means that growth is higher than for 63% of competitors in the same industry. In addition, the consolidated Safety Rank has a safer rank of 62 which means that the company has a financing structure that is safer than 62% comparable companies when looking at the amount of its debt, its refinancing requirements, and its ability to service debt. But the consolidated Value Rank has a less desirable rank of 3 which means that the share price of Commonwealth Bank of Australia is on the higher side compared with typical size in indicators such as revenues, profits, and invested capital. This means that the stock price is higher than for 97% of alternative stocks in the same industry. The consolidated Sentiment Rank also has a low rank of 33, which means that professional investors are more pessimistic about the stock than for 67% of alternative investment opportunities. ...read more
RECOMMENDATION: With a consolidated 360° View of 30, Commonwealth Bank of Australia is worse than 70% of all alternative stock investment opportunities based on the Obermatt Method. As only half of the consolidated Obermatt Ranks exhibit excellent performance, the picture is ambiguous. Growth is above-average (Growth Rank of 63), and the company is safely financed (Safety Rank of 62). However, professional market sentiment is low(Sentiment Rank of 33). The negative market view on Commonwealth Bank of Australia may be due to the high stock price (low value). A growth company like this may get too expensive at one point in time. If too many investors are desperate to board the train, they may drive stock prices above reasonable levels. It is typical for growth companies to have low value ratings, because investors are willing to pay more for companies that outperform their competitors. So the question is, how much more do you pay for the stock of Commonwealth Bank of Australia compared with alternatives? You can use the following rule of thumb: The value rank shouldn’t be lower than one hundred minus the growth rank. For example, if the growth rank is at 75, and the value rank is at 5, you should tread carefully. If the value rank is at 40, it still might be a good value if the value rank is above 60. As market sentiment is low, you should be careful with paying more than market-average for this stock and conduct further research into the company’s future growth potential. ...read more
Sentiment Strategy: Professional Market Sentiment for Commonwealth Bank of Australia only reserved
ANALYSIS: With an Obermatt Sentiment Rank of 33 (better than 33% compared with alternatives), overall professional sentiment and engagement for the stock Commonwealth Bank of Australia is below industry average. The Sentiment Rank is based on consolidating four sentiment indicators, with half of the metrics below and half above average for Commonwealth Bank of Australia. Analyst Opinions are at a rank of 1 (worse than 99% of alternative investments), which means that currently, stock research analysts tend to warn against investing in the stock of the company. But they are changing their opinions! Analyst Opinions Change has a rank of 61, which means that stock research experts are more positive in their investment recommendations in the company. In other words, they are getting more optimistic of stock investments in Commonwealth Bank of Australia. More encouragingly, the Professional Investors rank is 85, which means that professional investors hold more stock in this company than in 85% of alternative investment opportunities. Pros tend to favor investing in this company. But Market Pulse is on the lower side with a rank of 37, which means that the current professional news and professional social networks are on the negative side when discussing this company (more negative news than for 63% of competitors). ...read more
RECOMMENDATION: With a consolidated Sentiment Rank of 33 (less encouraging than 67% compared with investment alternatives), Commonwealth Bank of Australia has a reputation among professional investors that is below that of its competitors. The sentiment signals are mixed for Commonwealth Bank of Australia. While analysts and the news channels are negative, there is a change in what analysts think. Above-average institutional investors in this company support them. Sentiment signals remain mixed with analysts and news channels pessimistic, though improving, and professional investors above average. ...read more
Value Strategy: Commonwealth Bank of Australia Stock Price Value low
ANALYSIS: With an Obermatt Value Rank of 3 (worse than 97% compared with alternatives), Commonwealth Bank of Australia shares are significantly more expensive than comparable stocks. The Value Rank is based on consolidating four value indicators, with all four indicators below average for Commonwealth Bank of Australia. Price-to-Sales is 3 which means that the stock price compared with what market professionals expect for future profits is higher than 97% of comparable companies, indicating a low value concerning Commonwealth Bank of Australia's sales levels. Price-to-Book Capital (also referred to as market-to-book ratio) also has a low Price-to-Book Rank of 1, which means that both reliable company size indicators, sales, and invested capital cannot explain the high stock price of Commonwealth Bank of Australia. In addition, the two profit-related value indicators, Price-to-Profit (also referred to as price-earnings, P/E) with a low rank of 3 and Dividend Yield, which is lower than 91% of comparable companies, also make the stock more expensive compared with investment alternatives. ...read more
RECOMMENDATION: The overall picture with a consolidated Value Rank of 3, is a sell recommendation based on Commonwealth Bank of Australia's stock price compared with the company's operational size and dividend yields. How can market participants pay such a high price for Commonwealth Bank of Australia? One reason may be that the company is simply too popular. If enough people want a particular stock, its price can exceed reasonable levels. This is often the case for companies offering new and exciting products and everybody wants a piece of the action. Should you pay a lot for a hot stock such as Commonwealth Bank of Australia? It's risky, and even if the stock price continues to grow because of popular demand, it may return to more typical lower levels later. And that return can be sudden and quick, making it impossible for retail investors to exit on time. Sometimes, high prices are deserved. This is the case when it is justified to believe that the company will dominate a market with high profit margins. It has happened in the past for many technology companies and indeed for commercially successful pharmaceutical discoveries. Sometimes they last, sometimes, they get eaten alive. Commonwealth Bank of Australia may be such a type of stock. That would mean, retail investors should be careful, only considering investing a small part of their wealth in this exciting category and always being ready to lose more than half, if not all of the investment. ...read more
Growth Strategy: Commonwealth Bank of Australia Growth Momentum good
ANALYSIS: With an Obermatt Growth Rank of 63 (better than 63% compared with alternatives), Commonwealth Bank of Australia shows an above-average growth dynamic in its industry. Investors also speak of positive momentum. The Growth Rank is based on consolidating four value indicators, with half of the indicators below and half above average for Commonwealth Bank of Australia. Capital Growth has a rank of 81, which means that currently professionals expect the company to grow its invested capital more than 24% of its competitors. Investors welcomed this, visible in the Stock Returns rank of 65 (above 65% of alternative investments). But Sales Growth has only a rank of 47, which means that, currently, professionals expect the company to grow less than 53% of its competitors, and Profit Growth is also low at a rank of 24. ...read more
RECOMMENDATION: The overall picture with a consolidated Growth Rank of 63, is a buy recommendation for growth and momentum investors. This is an ambiguous picture. Revenue growth and capital growth are strong, but the growth in profit, which seems good, can also be an indication that growth momentum may be negative. The fact that stock returns have been above average doesn't help much, as stock returns are less reliable in showing a company’s future growth potential. Prices may perform well for the simple reason that investors were too pessimistic in the past and are now correcting their opinions and moving the stock price to a more reasonable level. As the growth picture is mixed for Commonwealth Bank of Australia, investors may want to look at value and sentiment indicators for a well-rounded picture of this stock. ...read more
Safety Strategy: Commonwealth Bank of Australia Debt Financing Safety above-average
| SAFETY METRICS | January 30, 2025 | |||||||
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| LEVERAGE | ||||||||
| LEVERAGE | 36 |
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| REFINANCING | ||||||||
| REFINANCING | 100 |
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| LIQUIDITY | ||||||||
| LIQUIDITY | 34 |
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| CONSOLIDATED RANK: SAFETY | ||||||||
| CONSOLIDATED RANK: SAFETY | 62 |
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ANALYSIS: With an Obermatt Safety Rank of 62 (better than 62% compared with alternatives), the company Commonwealth Bank of Australia has financing practices on the safer side, which mean that their overall debt burden is lower than average. This doesn't mean that the business of Commonwealth Bank of Australia is safe, it only means that the company is on the safer side regarding possible bankruptcy, assuming that public reporting is correct. The Safety Rank is based on consolidating three financing indicators, with just one indicator above average for Commonwealth Bank of Australia and the other two below average. Refinancing is at 100, meaning the portion of the debt about to be refinanced is below average. It has less debt in the refinancing stage than 100% of its competitors. But Leverage is high with a rank of 36, meaning the company has an above-average debt-to-equity ratio. It has more debt than 64% of its competitors. Liquidity is also on the riskier side with a rank of 34, meaning the company generates less profit to service its debt than 66% of its competitors. ...read more
RECOMMENDATION: With a consolidated Safety Rank of 62 (better than 62% compared with alternatives), Commonwealth Bank of Australia has a financing structure that is safer than that of its competitors. A good Refinancing Rank means that the problems of the company may not be around the corner. But high Leverage is only good if things go well, and low Liquidity is a signal for caution. The financing signals for Commonwealth Bank of Australia are on the riskier side, requiring the company's future to be on the safer side. Investors may want to look at Growth and Sentiment ranks before making an investment decision. ...read more
Combined financial peformance: Commonwealth Bank of Australia Below-Average Financial Performance
| COMBINED PERFORMANCE | January 30, 2025 | |||||||
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| VALUE | ||||||||
| VALUE | 3 |
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| GROWTH | ||||||||
| GROWTH | 63 |
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| SAFETY | ||||||||
| SAFETY | 34 |
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| COMBINED | ||||||||
| COMBINED | 32 |
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ANALYSIS: With an Obermatt Combined Rank of 32 (worse than 68% compared with investment alternatives), Commonwealth Bank of Australia (Diversified Banks, Australia) shares have somewhat below-average financial characteristics compared with similar stocks. Shares of Commonwealth Bank of Australia are low in value (priced high) with a consolidated Value Rank of 3 (worse than 97% of alternatives). But they show above-average growth (Growth Rank of 63) and are safely financed (Safety Rank of 62, which means below-average debt burdens). ...read more
RECOMMENDATION: A Combined Rank of 32, is a hold recommendation based on Commonwealth Bank of Australia's financial characteristics. Investors looking for growth and low financial risk may find this stock attractive. While the company Commonwealth Bank of Australia exhibits low value (Obermatt Value Rank of 3), which means that the stock price is rather high, it also demonstrates above-average growth (Obermatt Growth Rank of 63). This is a typical case, as high-growth companies are often expensive. Good financing practices (Obermatt Safety Rank of 62) are a double-edged sword: if the company continues growing, low debt limits shareholder returns. But if the company increases its debt, it will also increase risk. In other words, this is an investment on the safer side, despite the above-average price (low value). ...read more
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