Commonwealth Bank of Australia's (ASX:CBA) outlook is becoming "increasingly uncertain" as an expected housing slowdown and emerging funding challenges weigh on investor confidence, Jefferies said in a note on Tuesday.
One of Australia's oldest banks, Commonwealth Bank of Australia, founded in 1911, is scheduled to report its fiscal year 2026 results on Aug. 12. The bank is expected to deliver 6% net profit growth, with stronger lending volumes offsetting pressure from margins, higher costs and rising bad debt charges.
The brokerage estimates cash earnings of AU$10.86 billion, up 6% from a year ago, and in line with the Visible Alpha estimate.
Jefferies said the market will be watching for updates on loan growth, as volumes are set to ease from the elevated levels seen in fiscal 2026 due to softer housing demand.
Benefits from deposit pricing, which have supported profit margins, are also expected to fade in fiscal 2027. Commentary on the sustainability of deposit spreads, the impact of further rate cuts and competition for customer deposits will also be of significance.
The brokerage maintained its underperform rating on Commonwealth Bank of Australia and raised its price target to AU$145.20 from AU$144.40.