Based on our CoE-derived valuation methodology, we set our target price at $130. This reflects our key assumptions of a terminal ROE of ~15.0%, a cost of equity of 7.70%, and a terminal growth rate of 4.5%.

We believe banks' share prices and earnings performance are subject to common factors and risks: net interest margin pressure, interest rate risk, market risk, operational risk, funding risk, and credit risk. Adverse or favourable movements in these risk factors may cause CBA's share price to deviate from our target price.