Analysis of 3Q Earnings: Commonwealth Bank of Australia (CBA) Reports Unaudited Cash Profit of A$2.4 Billion

Commonwealth Bank of Australia on Smartkarma

Analyst coverage of Commonwealth Bank of Australia on Smartkarma reveals insights from Daniel Tabbush, who is leaning bearish on CBA’s outlook. In his report titled “CBA – Sharply Higher Past Due Loans, but Not Impaired, Alongside Surge of Australia Insolvencies,” Tabbush highlights the concerning trend of sharply increasing past due loans that are not impaired within CBA. This rise of 43% in the past two years raises potential implications for the bank’s credit costs, which could escalate significantly in the latter half of 2024 and the first half of 2025. Moreover, Tabbush underscores the broader economic challenges, indicating that the surge in Australia’s insolvencies across various sectors may further exacerbate the risk of these past due loans turning into non-performing loans (NPLs).

A look at Commonwealth Bank of Australia Smart Scores

Smart Score is a compound score for the Company indicating its overall outlook. It is derived by taking an equally weighted average of underlying Factor scores computed by Smartkarma

Based on the Smartkarma Smart Scores, Commonwealth Bank of Australia is projected to have a promising long-term outlook. With a strong momentum score of 4, indicating positive market sentiment and potential for upward price movement, the company seems to have significant growth prospects ahead. Additionally, the company scores equally well in the areas of value, dividend, and growth with a score of 3, suggesting stable fundamentals and potential for returns for investors.

However, the resilience score of 2 may raise some concerns about the company’s ability to weather potential economic downturns or market disruptions. Despite this, Commonwealth Bank of Australia‘s diversified range of services including banking, life insurance, and related offerings for various customer segments, such as individuals, small businesses, and medium-sized enterprises, positions the company well for continued success in the market.

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