CBA Downgrades Add to Woes for World’s Most Unloved Megabank

Commonwealth Bank of Australia may be at risk of entering a downgrade cycle as analysts warn slowing credit growth and proposed property tax changes are beginning to erode the outlook for the nation’s largest lender.

Analysts at Macquarie Group, JPMorgan Chase & Co. and Morgan Stanley all cut forecasts last week, with Macquarie analyst Carlos Cacho lowering his fiscal-year earnings-per-share estimate by 2% on a weaker revenue outlook and higher provisions. Meanwhile, JPMorgan’s Andrew Triggs expects CBA’s profit to deteriorate over the next two years on lower loan growth assumptions.