Commonwealth Bank of Australia (ASX: CBA) shares are down slightly in Tuesday lunchtime trade.
At the time of writing, the ASX bank shares are down around 0.1% to $151.11 each. Today’s decline means the shares are down around 7% over the past month, and around 6% lower for the year to date.
For context, the S&P/ASX 200 Index (ASX: XJO) is up around 0.5% for the day, at the time of writing. This index is down around 3% over the past month and largely flat for the year to date.
The question now is, are CBA shares a buy? Or will any investment made today turn into an inevitable loss by October 2027?
Let’s take a look.
Analyst outlooks on CBA shares
Higher oil prices, a stubbornly high inflation rate, a tight jobs market, and the potential for more interest rate increases are all strong headwinds for CBA over the next 12 months.
And brokers aren’t too positive on the outlook for the bank shares going forward.
Market Index data shows all experts have a strong sell rating on the shares. The $125.20 average target price implies a downside of around 17% at the time of writing.
The data is similar on TradingView. The majority of analysts (14 out of 16) have a sell or strong sell rating on CBA shares. Another two rate the bank shares as a hold.
The average $128.29 target price implies the shares could fall around 15% over the next 12 months. Although some are even more bearish and think they have the potential to crash around 40% to $90 by this time next year, at the time of writing.
So, if I buy $10,000 of CBA shares today, what could they be worth by this time next year?
If broker forecasts come to fruition, a $10,000 investment in CBA shares today could be worth significantly less by October 2027. Average downsides of 15% to 17% could see $10,000 turn into $8,300 to $8,500 within the next 12 months.
If the more bearish expert forecasts come to fruition, a $10,000 investment today could drop to $6,000 by this time next year.
Does that mean investors should avoid buying CBA shares?
If capital gain is your plan, CBA shares might not be for you at the current trading price.
But there are some other reasons that the bank shares could still make for a good investment.
Its large scale and strong operational performance means the company has the potential to be resilient through times of economic volatility, and its cyclical nature also means it can outperform during times of recovery.
And this is fantastic news for passive income-seeking investors.
CBA has a long history of paying its shareholders regular fully-franked dividends dating back to 1992. These are typically paid out every six months, in March and September.
The bank most recently paid its shareholders a $2.70-per-share fully-franked final dividend and a fully-franked full-year dividend of $5.05. That translates to a yield of around 3.3%.
Forecasts suggest the bank will pay its shareholders closer to $5.45 per share in FY27, which translates to a forward dividend yield of roughly 3.6%.
So while your $10,000 investment might not rocket higher in value, you could still earn a tidy passive income off of it.
Using the current trading price and forecasted $5.45 per share dividend in FY27, I’ve calculated that you could earn around $360 in passive income off a $10,000 investment in FY27.
The post If I invest $10,000 in CBA shares today, what could they be worth in October 2027? appeared first on The Motley Fool Australia.
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More reading
- How much could the big 4 banks’ share prices fall?
- Buy, hold, sell: CBA, Capstone Copper, Codan shares
- Why I’d buy CBA and Coles shares in October
- If I invest $10,000 in ANZ shares, what passive income could I receive in FY27?
- Are ASX 200 bank stocks a buy in October?
Motley Fool contributor Samantha Menzies has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.