Commonwealth Bank of Australia shares face valuation scrutiny

Commonwealth Bank of Australia (CBA) shares have recently been trading around $152.43, positioned closer to their 52-week low of $146.97 than their high of $185.59. Analysts are evaluating the potential for the share price to reach $180 by 2027, which would require an approximately 18% increase.

Valuation metrics for CBA include the price-to-earnings (P/E) ratio. Based on FY24 earnings per share of $5.63, CBA’s P/E ratio stands at approximately 27.1x, which is higher than the banking sector average of 18x. While a share price of $180 would represent a high valuation—projecting P/E ratios of roughly 26 to 27 times for FY27 and FY28 earnings—some argue the bank's strong digital presence, large deposit base, and market position in home loans and business banking could justify a premium over rivals like ANZ Banking Group.