MARKETS SPECTATOR: Commonwealth Bank bear

UBS analyst Jonathon Mott has a 12-month 'sell' rating on Commonwealth Bank, saying it's the most expensive bank in the world.

Jonathan Mott is at it again.

Barely three weeks after saying the share prices of Australia’s big four banks were in “bubble” territory, the UBS analyst says Commonwealth Bank is “the most expensive large bank in the world by nearly every measure”.

CBA is trading at 15.6 times Mott’s 2013 forecast earnings. He estimates the bank’s price to book value is 2.7 times and its price to pre-provision profit is about 10 times. More strikingly, Mott reckons the stock will fall to $60, a 19 per cent decrease from its $73.49 close yesterday on the ASX.

Mott has a 12-month “sell” rating on CBA shares. Yesterday, the bank’s stock hit a 52-week high, $74.18.

The UBS analyst has increased his forecast for the bank’s 2013 net profit to $7.69 billion from $7.65 billion because of a drop in bad debt charges compared with slowing loan growth. In 2014, Mott forecasts CBA will make a net profit of $8.06 billion compared with a previous forecast of $8.05 billion.

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