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Commonwealth Bank of Australia (CMWAY)
OTHER OTC:CMWAY
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Commonwealth Bank of Australia
(OTC:CMWAY)
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Rating:61Neutral
Price Target:
$120.00
▲(16.41% Upside)
Action:ReiteratedDate:02/11/26
The score is held back primarily by weak cash flow quality and elevated leverage despite strong reported revenue growth. Technicals are supportive with a clear uptrend, but overbought indicators add near-term risk. Valuation looks demanding (high P/E) with only moderate dividend support, while the latest earnings call was broadly positive on momentum and capital strength but acknowledged margin and cost headwinds.
Positive Factors
Deposit & Loan Growth
Sustained deposit and lending inflows materially bolster franchise scale and stable funding. Large deposit growth reduces wholesale reliance and supports net interest income capacity, while above-system mortgage and business lending expansion preserves market share and recurring revenue over the medium term.
Capital & Liquidity Strength
A strong CET1 buffer, sizable liquid assets and high deposit funding provide durable shock absorption and regulatory headroom. This underpins lending flexibility, dividend capacity and strategic investments, reducing solvency and liquidity risks across multiple macro scenarios.
Tech & AI-led Operational Gains
Significant cloud migration and AI deployment increase processing speed, reduce critical incidents and lower manual costs. Higher automation and fraud-detection capabilities boost customer experience and scalability, creating durable productivity gains and competitive differentiation over time.
Negative Factors
Weak Cash Flow Generation
Reported profits are not fully matched by operating cash conversion, limiting internally generated funds for capex, dividends and deleveraging. Persistent negative operating cash flow raises reliance on capital markets or accounting timing, weakening long-term financial flexibility.
Elevated Leverage
Material leverage increases sensitivity to rate shocks and funding stress, constraining strategic optionality. A high debt-to-equity ratio reduces buffer for credit losses or margin contraction and can raise funding costs, limiting durable capacity for share buybacks or aggressive growth.
Margin & Cost Pressure
Structural deposit competition, higher-yield savings mix and escalating IT/vendor inflation compress net interest margin and widen the cost base. Together these trends pressure long-term profitability unless offset by material efficiency gains or repricing power, which may be gradual.
Commonwealth Bank of Australia (CMWAY) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$205.73B
Dividend Yield2.85%
Average Volume (3M)3.19K
Price to Earnings (P/E)31.2
Beta (1Y)0.48
Revenue Growth5.15%
EPS Growth6.57%
CountryUS
Employees49,682
SectorFinancial
Sector Strength70
IndustryBanks - Diversified
Share Statistics
EPS (TTM)2.10
Shares Outstanding1,673,462,400
10 Day Avg. Volume2,567
30 Day Avg. Volume3,185
Financial Highlights & Ratios
PEG Ratio4.71
Price to Book (P/B)3.94
Price to Sales (P/S)4.45
P/FCF Ratio-126.04
Enterprise Value/Market Cap1.99
Enterprise Value/Revenue4.53
Enterprise Value/Gross Profit13.90
Enterprise Value/Ebitda28.21
Forecast
1Y Price TargetN/A
Price Target UpsideN/A
Rating ConsensusN/A
Number of Analyst Covering0
EPS Forecast (FY)N/A
Revenue Forecast (FY)N/A
Commonwealth Bank of Australia Business Overview & Revenue Model
Company DescriptionCommonwealth Bank of Australia provides integrated financial services in Australia, New Zealand, and internationally. It operates through Retail Banking Services, Business Banking, Institutional Banking and Markets, and New Zealand segments. The company offers retail, premium, business, offshore, and institutional banking services; and funds management, superannuation, and share broking products and services, as well as car, health, life, income protection, and travel insurance. It offers transaction, savings, foreign currency accounts; term deposits; personal and business loans; overdrafts; equipment finance; credit cards; international payment and trade; and private banking services, as well as home and car loans, and importer finance products. The company also provides advisory services for high net worth individuals; equities trading and margin lending services; debt capital, transaction banking, working capital, and risk management services; and international and foreign exchange services. As of June 30, 2021, it operated 875 branches and 2,492 ATMs. The company was founded in 1911 and is based in Sydney, Australia.
How the Company Makes MoneyCommonwealth Bank generates revenue primarily through interest income from loans and advances, which constitutes a significant portion of its earnings. The bank charges interest on various loan products, including home loans, personal loans, and business loans. Another substantial revenue stream comes from fees and commissions associated with banking services, such as account maintenance fees, transaction fees, and fees for wealth management services. Additionally, CBA earns income from its investment portfolio and trading activities. The bank also has strategic partnerships with various fintech companies and service providers, enhancing its digital offerings and customer reach, which contributes to its overall profitability. Furthermore, CBA benefits from economies of scale as one of the leading banks in Australia, allowing it to manage costs effectively while expanding its service offerings.
Commonwealth Bank of Australia Earnings Call Summary
Earnings Call Date:Feb 10, 2026
(Q2-2026)
| % Change Since: |
Next Earnings Date:Aug 11, 2026
Earnings Call Sentiment Positive
The call emphasized robust financial and franchise performance: double-digit growth in parts of the business bank, strong deposit and mortgage inflows, ~6% cash profit growth, a healthy capital and liquidity position (CET1 12.3%, liquid assets $199bn) and continued investment in technology and AI with measurable productivity and safety gains. Offsetting these positives are persistent competitive intensity (pressuring margins), rising operating and IT/vendor costs, and macro/interest-rate uncertainty that could moderate future credit growth and deposit/margin dynamics. Management portrays a confident, disciplined stance with conservative provisioning and capital buffers.Q2-2026 Updates
Positive Updates
Profitability and EPS Growth
Cash/stated profit around $5.4bn (statutory and cash profits on continuing operations), with cash net profit up ~6% year-on-year and earnings per share up $0.19. Cash profit growth described as a little over 6% on both the prior corresponding period and the prior half.
Dividend and Capital Returns
Interim dividend of $2.35 per share, up $0.10 on the prior corresponding period; fully franked. Dividend payout ~72% headline (normalized ~74%). $4.4bn in dividends paid this half; 11th consecutive period of DRP neutralization and DRP offered fully neutralized with no discount.
Strong Balance Sheet and Liquidity
Common Equity Tier 1 ratio 12.3% (about $10bn above minimum regulatory requirements). Liquid assets $199bn. Deposit funding ratio ~79% and weighted average maturity of long-term funding 5.2 years. Total provisions ~$6.3bn, ~$2.8bn above central economic scenario.
Exceptional Deposit and Lending Growth
Deposit balances increased by ~$44bn in the half. Mortgage balances up ~$45bn (≈7% year-on-year) to $622bn. Business lending grew strongly (cited as 12% and described as 1.3x system), with business lending balances up ~$18bn in the year and 87% growth over six years in business lending balances.
Revenue and Income Momentum
Operating income increased 6.6% year-on-year; net interest income increased (up $761m) supported by above-system profitable lending and deposit growth. Retail pre-provision profit +5%; Business Bank pre-provision profit +8% and cash profit +14%; Institutional pre-provision profit +13%.
Customer Franchises, Engagement and Market Shares
Retail MFI share increased slightly to 33.5%; Business Bank MFI share up to 26.9% (310 bps increase since COVID). 9.4m CommBank app users and 14m daily log-ins; 12m retail transaction accounts (35% increase since start of COVID, +585k in past year). 97% of home loan customers hold a transaction account with CBA.
Technology, AI and Operational Improvements
Investing in data, technology and AI: migrated core banking to cloud (30% more technology changes), reduced critical incidents and improved recovery times by 65%, deployed 2,900+ AI bots against scammers and send ~40,000 daily suspicious-activity alerts. Auto-decisioning: 70% of proprietary home loan applications auto-decisioned same day; BizExpress auto approvals doubled in 2 years and annual loan maintenance reduced by ~85%.
Credit Quality and Provisioning Buffer
Credit environment described as benign: loan impairment expense ~$319m (flat y/y), business loan losses ~6 basis points in the half, troublesome/nonperforming exposures decreased and home loan hardship customers down 28% since June 2024. Provision balance of ~$6.3bn provides a material buffer above central economic scenario.
Negative Updates
Intense Competitive Pressures
Management flagged materially shifting competitive landscape with intense competition for deposits and lending; this contributes to margin pressure and requires disciplined pricing choices. One competitor has had rapid household deposit share growth which management highlighted as a market dynamic risk.
Net Interest Margin Compression and Mix Headwinds
Net interest margin fell ~4 basis points over the half (mainly due to higher mix of low-margin liquid assets and institutional repos); excluding those items margins were ~1 basis point lower. Growth in higher-rate savings products (GoalSaver) has been a consistent headwind (cited as ~1 bp per quarter headwind from mix).
Rising Operating Costs and IT Vendor Inflation
Underlying operating expenses increased ~5.5% y/y (excluding restructuring/notable items). Company noted inflationary pressures, higher IT/vendor costs, increased cloud consumption and a lowered capitalization rate (more costs expensed), and ~$170m notable expense mostly from a New Zealand legal settlement in the prior period.
Headcount and Cost-to-Income Trajectory
Headcount up nearly ~20% over ~5 years despite technology investments; cost-to-income remains in the mid-40s (similar to 2019). Management acknowledges opportunity to improve cost trajectory but noted continued investment needs (resilience, cyber, frontline).
Potential Sensitivity to Higher Interest Rates and Inflation
RBA rate hikes (cash rate 3.85% in Feb) and inflation remaining above target present upside pressure on rates and potential to slow credit growth; management notes uncertainty around how further rate increases will impact system growth over next 6–12 months.
Wholesale and Deposit Pricing Risk
Wholesale funding spreads have been benign but could revert; a reversion would likely fuel more deposit competition and margin pressure. Management highlighted the link between wholesale spreads and future deposit pricing dynamics as a risk.
NPS and Customer Experience Flag in Business Banking
Although NPS leadership remains in consumer and institutional banking, CBA dropped from #1 to #2 in business banking after 15 months at the top — a signal management called out and will monitor as part of franchise execution.
Company Guidance
Management guided to continued strong credit and deposit momentum with the economics team expecting system credit growth of roughly 6–8% over the next couple of years, and flagged a number of key metrics to underpin that outlook: cash and statutory profit were ~$5.4bn for the half (cash net profit +6% YoY, EPS +$0.19), operating income +6.6% (NII +$761m), operating expenses +5.5% ex-notables, loan impairment $319m and total provisions ~$6.3bn (≈$2.8bn above the central scenario); balance sheet settings include CET1 12.3% (~$10bn above regulatory minimum), 79% deposit funding, liquid assets $199bn, weighted-average maturity of long-term funding 5.2 years, customer deposits +$44bn in the half (annualised deposit growth 10% over 6 months), mortgage balances +$45bn/7% YoY to $622bn, business lending +12% (1.3x system, +$18bn in the year), retail MFI 33.5% and business MFI 26.9%, replicating portfolio reinvestment ~$2bn/month with 2–3 halves of positive tractor/replicating momentum expected, an effective tax rate settling near 30% for FY26, an interim fully franked dividend of $2.35 (up $0.10) with headline payout 72% (normalized 74%) and DRP neutralized (no discount), and ongoing investment (including $1bn pa on scams/fraud protection).Commonwealth Bank of Australia Financial Statement Overview
Summary
Income statement strength (very strong revenue growth) is offset by declining margins. Balance sheet leverage is elevated (high debt-to-equity), increasing risk. Cash flow is the biggest weakness with negative operating and free cash flows, weighing on overall financial quality.Income Statement
The income statement shows a strong revenue growth rate of 160.88% in the most recent year, indicating significant expansion. However, the gross profit margin has decreased from previous years, and the net profit margin has also declined to 14.50%. The EBIT and EBITDA margins are relatively stable, suggesting consistent operational efficiency.70
Positive
Balance Sheet
The balance sheet reveals a high debt-to-equity ratio of 2.74, indicating significant leverage, which could pose financial risks. Return on equity is stable at 12.84%, reflecting consistent profitability. The equity ratio is not explicitly calculated, but the high leverage suggests a lower equity proportion relative to total assets.60
Neutral
Cash Flow
Cash flow analysis shows negative operating and free cash flows, with a significant decline in free cash flow growth. The operating cash flow to net income ratio is negative, indicating cash flow challenges. The free cash flow to net income ratio is positive but reflects reliance on non-operational cash sources.45
Neutral
| Breakdown | TTM | Jun 2025 | Jun 2024 | Jun 2023 | Jun 2022 | Jun 2021 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 90.09B | 69.74B | 26.12B | 26.33B | 25.14B | 23.65B |
| Gross Profit | 29.38B | 28.66B | 27.31B | 27.07B | 23.29B | 23.55B |
| EBITDA | 14.48B | 15.95B | 0.00 | 15.41B | 15.17B | 13.76B |
| Net Income | 10.25B | 10.12B | 9.39B | 10.00B | 10.69B | 10.18B |
Balance Sheet | ||||||
| Total Assets | 1.41T | 1.35T | 1.25T | 1.25T | 1.22T | 1.09T |
| Cash, Cash Equivalents and Short-Term Investments | 89.91B | 55.50B | 47.32B | 108.01B | 120.31B | 88.52B |
| Total Debt | 207.44B | 216.23B | 136.15B | 181.67B | 188.00B | 160.43B |
| Total Liabilities | 1.33T | 1.28T | 1.18T | 1.18T | 1.14T | 1.01T |
| Stockholders Equity | 77.23B | 78.78B | 73.09B | 71.63B | 72.83B | 78.68B |
Cash Flow | ||||||
| Free Cash Flow | 0.00 | -2.46B | -48.57B | 6.78B | 20.68B | 12.54B |
| Operating Cash Flow | 23.23B | -825.00M | -48.16B | 8.35B | 21.66B | 13.30B |
| Investing Cash Flow | -76.46B | -329.00M | -1.11B | -15.74B | -96.76B | -38.79B |
| Financing Cash Flow | 62.38B | 7.59B | -10.71B | -5.62B | 106.72B | 85.98B |
Commonwealth Bank of Australia Technical Analysis
Positive
103.08
Price Trends
109.40
Positive
107.32
Positive
109.26
Positive
Market Momentum
5.23
Positive
63.29
Neutral
16.68
Positive
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For CMWAY, the sentiment is Positive. The current price of 103.08 is below the 20-day moving average (MA) of 118.84, below the 50-day MA of 109.40, and below the 200-day MA of 109.26, indicating a bullish trend. The MACD of 5.23 indicates Positive momentum. The RSI at 63.29 is Neutral, neither overbought nor oversold. The STOCH value of 16.68 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for CMWAY.
Commonwealth Bank of Australia Peers Comparison
UnderperformOutperform
Sector (68)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
77 Outperform | $200.49B | 16.41 | 9.01% | 2.48% | -1.09% | 8.53% | |
72 Outperform | $176.15B | 12.10 | 13.08% | 1.85% | -15.34% | 16.71% | |
71 Outperform | $306.67B | 15.35 | 12.32% | 4.14% | -9.54% | -22.46% | |
68 Neutral | $18.00B | 11.42 | 9.92% | 3.81% | 9.73% | 1.22% | |
61 Neutral | $205.73B | 31.16 | ― | 2.85% | 5.15% | 6.57% | |
59 Neutral | $254.81B | 13.02 | 11.85% | 1.80% | -4.37% | 26.41% | |
58 Neutral | $194.96B | 15.76 | 6.72% | 1.94% | -0.62% | 105.57% |
* Financial Sector Average
CMWAY
Commonwealth Bank of Australia
122.45
27.25
28.62%
C
Citigroup
111.45
40.93
58.05%
HSBC
HSBC Holdings
89.73
32.47
56.70%
MUFG
Mitsubishi UFJ
18.09
5.55
44.27%
WFC
Wells Fargo
82.58
10.84
15.11%
SAN
Banco Santander SA
11.96
5.73
91.88%
Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.