Are CBA, NAB shares worth buying now?
Analysts are downbeat on CBA shares, while NAB shares are expected to see a mild upside of 2%.
- Commonwealth Bank of Australia (ASX: CBA) share price rises 0.8%
- BlackRock opposed a call for CBA to stop fossil fuel funding
- National Australia Bank (ASX: NAB) stock advances to A$28.81 per share
- Bloomberg Intelligence is bullish on NAB’s potential dividend hike
- Keen to take advantage of CBA and NAB’s rising share prices? Open an account with us to long the stocks now.
Commonwealth Bank shareholders reject resolution
Shares of the country’s biggest lender Commonwealth Bank of Australia (CBA) were trading 0.8% higher at A$104.73 as at 14:12 AEST in Sydney.
There were 11 ‘sell’ calls on the stock, two ‘hold’, and two ‘buy’ recommendations from research teams, which gave an average target price of A$95.93 per share, according to Bloomberg data.
That implies a potential downside of about 8% based on Tuesday’s close of A$103.89.
Last Wednesday (14 October 2021), CBA’s largest shareholder BlackRock said it had voted against a resolution calling for the bank to stop financing new fossil fuel projects.
The resolution also asked CBA to publish targets to cut its exposures to fossil fuels, in line with net-zero greenhouse gas emissions by 2050.
BlackRock, the world’s biggest money manager, said the resolution was overly prescriptive and risked ‘unduly constraining management’s ability to make business decisions’.
The resolution was overwhelmingly rejected, with only 14% of voting CBA shareholders supporting it.
Separately, CBA and Westpac Banking Corp last Thursday announced that they will require Covid-19 vaccines for all employees working at their offices and branches across Australia.
The nation’s two largest banks said the rule will apply to staff in the eastern states by the start of December 2021, and to employees in other states by February 2022.
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National Australia Bank stock price ticks up
Meanwhile, NAB and Australia & New Zealand Banking Group are following state guidelines for vaccination requirements for their staff.
Shares of NAB rose 0.6% to trade at A$28.81 as at 14:11 AEST on Wednesday.
The stock garnered nine ‘buy’ ratings from research teams, six ‘hold’ calls, and no ‘sell’ recommendations.
Their average 12-month target price was A$29.21, Bloomberg data showed, implying a potential 2% upside from Tuesday’s close of S$28.65.
Bloomberg Intelligence (BI) analysts recently wrote that NAB’s dividend for FY2021 ending September could more than double from the previous year, paying out at the upper end of 65-75% guidance. That would be above last year’s 41% and close to its 82% five-year average.
The bank’s profit could also jump by more than 40% this fiscal year, compared to FY2020, and its conservative provisioning will protect it from possible further Covid-related shocks, BI added.
NAB will report its FY2021 results on 09 November 2021.
Earlier on Wednesday, NAB announced the appointment of James Spenceley as a non-executive director, effective 01 December 2021.
Spenceley was the founder and former CEO of Vocus Communications, Australia’s fourth largest telecommunications company.
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This information has been prepared by IG, a trading name of IG Australia Pty Ltd. In addition to the disclaimer below, the material on this page does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. IG accepts no responsibility for any use that may be made of these comments and for any consequences that result. No representation or warranty is given as to the accuracy or completeness of this information. Consequently any person acting on it does so entirely at their own risk. Any research provided does not have regard to the specific investment objectives, financial situation and needs of any specific person who may receive it. It has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such is considered to be a marketing communication. Although we are not specifically constrained from dealing ahead of our recommendations we do not seek to take advantage of them before they are provided to our clients.
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