Stock Analysis

The Commonwealth Bank of Australia (ASX:CBA) Annual Results Are Out And Analysts Have Published New Forecasts

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It's been a good week for Commonwealth Bank of Australia (ASX:CBA) shareholders, because the company has just released its latest annual results, and the shares gained 2.5% to AU$104. Revenues were AU$26b, with Commonwealth Bank of Australia reporting some 2.5% below analyst expectations. This is an important time for investors, as they can track a company's performance in its report, look at what experts are forecasting for next year, and see if there has been any change to expectations for the business. We've gathered the most recent statutory forecasts to see whether the analysts have changed their earnings models, following these results.

See our latest analysis for Commonwealth Bank of Australia

ASX:CBA Earnings and Revenue Growth August 11th 2023

Taking into account the latest results, the most recent consensus for Commonwealth Bank of Australia from 15 analysts is for revenues of AU$27.2b in 2024. If met, it would imply a credible 2.8% increase on its revenue over the past 12 months. Statutory earnings per share are expected to dip 5.6% to AU$5.74 in the same period. Before this earnings report, the analysts had been forecasting revenues of AU$27.2b and earnings per share (EPS) of AU$5.74 in 2024. So it's pretty clear that, although the analysts have updated their estimates, there's been no major change in expectations for the business following the latest results.

There were no changes to revenue or earnings estimates or the price target of AU$90.59, suggesting that the company has met expectations in its recent result. There's another way to think about price targets though, and that's to look at the range of price targets put forward by analysts, because a wide range of estimates could suggest a diverse view on possible outcomes for the business. There are some variant perceptions on Commonwealth Bank of Australia, with the most bullish analyst valuing it at AU$105 and the most bearish at AU$80.00 per share. Even so, with a relatively close grouping of estimates, it looks like the analysts are quite confident in their valuations, suggesting Commonwealth Bank of Australia is an easy business to forecast or the the analysts are all using similar assumptions.

One way to get more context on these forecasts is to look at how they compare to both past performance, and how other companies in the same industry are performing. It's pretty clear that there is an expectation that Commonwealth Bank of Australia's revenue growth will slow down substantially, with revenues to the end of 2024 expected to display 2.8% growth on an annualised basis. This is compared to a historical growth rate of 3.5% over the past five years. Compare this to the 19 other companies in this industry with analyst coverage, which are forecast to grow their revenue at 2.9% per year. So it's pretty clear that, while Commonwealth Bank of Australia's revenue growth is expected to slow, it's expected to grow roughly in line with the industry.

The Bottom Line

The most important thing to take away is that there's been no major change in sentiment, with the analysts reconfirming that the business is performing in line with their previous earnings per share estimates. Happily, there were no real changes to revenue forecasts, with the business still expected to grow in line with the overall industry. There was no real change to the consensus price target, suggesting that the intrinsic value of the business has not undergone any major changes with the latest estimates.

Following on from that line of thought, we think that the long-term prospects of the business are much more relevant than next year's earnings. At Simply Wall St, we have a full range of analyst estimates for Commonwealth Bank of Australia going out to 2026, and you can see them free on our platform here..

Even so, be aware that Commonwealth Bank of Australia is showing 1 warning sign in our investment analysis , you should know about...

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.