The Commonwealth Bank of Australia (ASX: CBA) share price has slumped 26.36% lower this year, but is it in the buy zone?
Is the CBA share price a bargain?
It seems like an age ago that CBA shares hit a new 52-week high of $91.05 per share. That was mid-February but the coronavirus pandemic has turned the ASX on its head.
The current $58.84 CBA share price would normally look like an absolute bargain. However, we're seeing the Big 4 banks report major impairments in their latest results.
Westpac Banking Corp (ASX: WBC) announced $2.2 billion in first-half 2020 impairments following a similar announcement from National Australia Bank Ltd (ASX: NAB).
CBA already reported its earnings in February, announcing a $4.48 billion cash profit. Of course, this is in a pre-coronavirus world and times are different.
But we all want to know if the CBA share price is undervalued or simply a sign of the times. I think bank dividend cuts certainly don't help optimism for the ASX bank shares.
However, the Big 4 will continue to be a pillar of the Aussie economy. Payouts may drop for a few years, but these institutions still churn out billions of dollars in profit each year.
Sure, the rise of the neobanks will provide competition and maybe reduce their market share. We're seeing a number of different lenders enter the market from all sides.
But the CBA share price has been hammered, yet could still do OK from the pandemic response. The banks are being asked to shoulder some economic burden in the fallout. But that doesn't mean moves like reducing mortgage payments to their minimum will not boost the bank's bottom line.
Foolish takeaway
ASX bank shares are notoriously hard to value at the best of times. In the current environment, the CBA share price is very hard to pick in terms of good value.
I think if you're a long-term buyer, the CBA share price could be a steal for $58.84 per share but I might be waiting for more certainty in 2020 before diving in.
