Stock of the day: Commonwealth Bank
Commonwealth Bank of Australia reported a $9.8 billion cash profit, surpassing market expectations despite a 2% decline from the previous year. Analysts debate the bank's high valuation and future growth prospects.
![Video poster image](https://cf-images.eu-west-1.prod.boltdns.net/v1/static/2830693144001/ee79a5f5-a928-4f43-92cf-6a81612fd9c3/f8997a1c-7ca3-4147-9b54-869fdef7c5f1/1280x720/match/image.jpg)
[AI generated]
This video was created on 14 August for IG audiences by ausbiz.
Stock of the day: Commonwealth Bank (ASX: CBA)
Mixed results raise questions on valuation
Commonwealth Bank of Australia (CBA) takes the spotlight following its latest earnings report. The bank reported a cash profit of $9.8 billion for the full year, marking a 2% decline from the previous year but still surpassing market expectations. Despite the dip in profit, driven by inflationary pressures on operating expenses, CBA’s share price rose 3% as investors responded positively to the result.
Strong dividend amid mixed financials
CBA announced a final dividend of $2.50 per share, bringing its full-year dividend to $4.65, fully franked. This payout exceeded forecasts and was well-received by retail investors.
However, analysts have pointed out that while CBA continues to outperform its peers, its valuation, trading at over 23 times earnings, raises concerns. The bank’s ability to maintain its margins and navigate rising expenses has been commendable, but questions linger about the sustainability of such a high multiple given the modest growth in earnings and revenue.
The information 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 Bank S.A. 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 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. See full non-independent research disclaimer.
![](http://a.c-dn.net/c/content/dam/publicsites/igcom/uk/images/Rebrand/Article_banners/Indices_global_component_banner.jpg/jcr:content/renditions/original-size.webp)
Discover how to trade the markets
Learn how indices work – and discover the wide range of markets you can trade CFDs on – with IG Academy's free ’introducing the financial markets’ course.
Put learning into action
Try out what you’ve learned in this index strategy article risk-free in your demo account.
Ready to trade indices?
Put the lessons in this article to use in a live account – upgrading is quick and easy.
- Get fixed spreads from 1 point on the FTSE 100, 1.2 on the Germany 40, and 0.4 on the US 500
- Protect your capital with risk management tools
- Trade more 24-hour markets than any other provider
Inspired to trade?
Put your new knowledge into practice. Log in to your account now.
Live prices on most popular markets
- Forex
- Shares
- Indices
Prices above are subject to our website terms and agreements. Prices are indicative only. All shares prices are delayed by at least 15 mins.