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Commonwealth Bank of Australia has been able to streamline innovation through a two-week sprint or AI hackathon. The bank, which services 17 million customers, built about 20 AI agents in that time, Domenic Ziino, executive general manager of business bank operations and technology at Commonwealth Bank, said Nov. 19 at BIAN Banking Summit 2025 in […]
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Whitney McDonald
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Jason Kururangi of Milford Asset Management explains why he is bearish on the Australian banking sector and shares where he would allocate assets to instead.
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Adam Dawes of Shaw and Partners Australian banks are mainly “deposit takers” and “home loan takers,” but the Commonwealth Bank of Australia is “looking to be better placed.”
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Australia’s consumer price index reached the highest since 1990 for the quarter of December, 2022.
Fairfax Media | Fairfax Media | Getty Images
Inflation in Australia rose to a new 32-year high of 7.8% in the final quarter of the fiscal year of 2022, rising at its steepest pace since March 1990.
The annualized figure of a rise in consumer prices backed by higher prices in food, automotive fuel, and new residential construction, according to the Australian Bureau of Statistics.
Prices rose the most for costs related to domestic and international travel, which rose by 13.3% and 7.6%, respectively.
Economists polled by Reuters had forecast the quarter’s consumer price index to rise 7.5%, lower than the Reserve Bank of Australia’s forecast of 8%. Prices of goods rose 9.5%, a slightly less dramatic print than the 9.6% from the previous quarter — the cost of services rose 5.5%, the highest since 2008.
The “trimmed mean annual inflation,” a reading that excludes large increases and declines in prices, increased to 6.9%, the highest since the government has started publishing that information in 2003, the release said.
Stocks of banks listed in Australia erased earlier gains following the release of the report, including Commonwealth Bank of Australia, Westpac Banking Group, and National Australia Bank trading below the flatline – on slashed hopes the central bank will pause in hiking rates to tame inflation.
The Australian dollar rose 0.51% and last traded at 0.7082 against the U.S. dollar.
On Tuesday, the National Australia Bank’s monthly business survey showed worsened business conditions for December with a reading of 12 points, a decline from November’s print of 20 points. A level above zero indicates favorable conditions, while numbers below zero represent negative conditions.
The survey reflects deteriorated trading conditions, profitability and employment, NAB said.
“The main message from the December monthly survey is that the growth momentum has slowed significantly in late 2022, while price and purchase cost pressures have probably peaked,” NAB chief economist Alan Oster said.
Meanwhile, business confidence in December rose by 3 points to -1, an improved reading from -4 points seen in November.
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Equity analysts have slashed estimates and price targets over recent days as companies continue to report disappointing third-quarter results.
CNBC Pro screened almost 1,500 large and mid-cap global stocks and found a number of major companies with sell or underweight ratings from investment banks.
Thirteen of these stocks — all part of the MSCI World Index — have median analyst price targets below their current share price, according to FactSet data.
| Name | Ticker | Price target | Downside risk |
|---|---|---|---|
| AMC Entertainment | AMC-USA | 2.57 USD | -61.3% |
| T. Rowe Price Group | TROW-USA | 95.50 USD | -12.4% |
| AEON Co., Ltd. | 8267-TKS | 2400.00 JPY | -12.2% |
| Uniper SE | UN01-ETR | 2.75 EUR | -11.1% |
| Franklin Resources, Inc. | BEN-USA | 21.00 USD | -10.4% |
| Clorox Company | CLX-USA | 128.00 USD | -9.5% |
| Commonwealth Bank of Australia | CBA-ASX | 94.57 AUD | -7.7% |
| Naturgy Energy Group | NTGY-MCE | 23.70 EUR | -6.0% |
| Aeroports de Paris SA | ADP-PAR | 125.00 EUR | -5.8% |
| Fortescue Metals Group | FMG-ASX | 15.14 AUD | -5.8% |
| Sharp Corporation | 6753-TKS | 850.00 JPY | -5.3% |
| Abrdn plc | ABDN-LON | 1.50 GBP | -3.4% |
| Consolidated Edison, Inc. | ED-USA | 83.00 USD | -3.2% |
Source: CNBC, FactSet
Equity analysts at investment banks and research firms rate stocks as sell or underweight if they believe the shares will perform poorly over the next 12 months.
There are currently five U.S.-listed stocks on the list that analysts expect to fall below current levels.
The world’s largest movie theater company once again features at the top of the list. With analysts maintaining their price targets, the rally in AMC‘s shares over the past two weeks means downside risks to its share price has risen to more than 60%, according to FactSet data.
“Structural shifts might be necessary to achieve reasonable profitability, be it a material reduction in sector screen counts, reduced operating lease levels, or incremental support from the studios via improved film splits or longer exclusive theatrical windows,” analysts at Credit Suisse Equity Research said in a note to clients on Oct. 27.
They expect the stock to fall to $0.95 – an 85% drop. “With little visibility as to the extent any of these might be achieved near-to-mid term, we maintain our Underperform rating.”
The global investment management firm headquartered in Maryland had either a sell or hold rating by all 9 analysts covering the stock, according to FactSet. Despite shares in the company being down by 44% this year, the median analyst price target of $95.5 means there could be further pain ahead for investors.
“While T. Rowe has historically had best-in-class performance, results more recently have deteriorated,” said analysts at J.P. Morgan, who have an underweight rating on the stock. “Furthermore, organic growth continues to weaken with recent results representing some of the slowest organic growth seen for the company.” With a price target of $93 per share, they expect the stock to drop by 14.7% by December next year.
The parent company of fund manager Franklin Templeton also does not have a single buy rating from any of the analysts covering the stock, according to FactSet data.
Franklin, which has $1.3 trillion worth of assets under management, is expected to deliver a year-on-year decline in earnings on lower revenues when it reports third-quarter results on Nov. 1, according to Zacks Equity Research.
Shares in the company, which suffers from some of the same problems troubling its competitor TROW, have fallen by nearly 30% this year.
Other stocks with price targets below current trading levels include Japanese multinational retailer AEON, U.S.-listed Clorox, and U.K. financial services company Abrdn plc.
German energy giant Uniper— which the German government has agreed to nationalize — and Spanish energy utilities Naturgy Energy also made the list. The European utility sector faces major headwinds as natural gas prices remain more than four times higher than their decade-long average.
Shares in Australian corporate giants Fortescue Metals and the Commonwealth Bank of Australia are also trading higher than their projected price targets.
France’s Aeroports de Paris, Japanese electronics manufacturer Sharp Corporation, and U.S.-listed energy giant Consolidated Edison were some of the other stocks with the smallest price difference between current share price and median analyst price targets.
Four stocks — Amerco, Isracard, Loews, and Erie Indemnity — were excluded from our filter due to a lack of analyst ratings or price targets within the past 100 days.
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