He was the first of the pack to place a (more generous) hold recommendation on CBA, breaking away from the pack that was calling it as a sell.

Like the pack, Johnson understands that, based on fundamentals, CBA’s share price punches well above its weight. He has a target price of $102.53 after applying a 50 per cent premium to the $70 fundamental valuation.

But he has a thesis that the market dynamics pushing the CBA share price up are rooted in the float of the bank some 30 years ago.

He opines that institutional shareholders are perennially underweight because retail investors have hogged the stock for decades, unwilling to sell and crystallise a whopping taxable profit.

Johnson provides the example of a retail investor who bought 400 shares in the CBA float in 1991 for $2160 and reinvested the dividends – they would be sitting on shares worth more than $270,000. And those who didn’t reinvest in dividends would have earned a fully franked dividend yield.

The fact that CBA is 50 per cent owned by sticky domestic retail investors has squeezed out institutional investors, who will be at a performance disadvantage due to being underweight in CBA, which is the second-largest member of the ASX 200.

But the supply-demand dynamics are not the only reason Johnson believes CBA is superior to its peer pack in many respects.

“CBA significantly outranks peers under our assessment framework of Franchise [best brand, deposit gathering, tech stack, declining reliance on broker distribution, etc], Management [far more collegiate cross-divisional strategy than peers] to extract excess shareholder value from comparative weakness of peers and value of dominant retail bank franchise, long-term focus as opposed to short term-ism earnings focus of peers,” Johnson said in his most recent note.

Loading

But the reality is that, in the short-term, analysts including Johnson are not forecasting earnings growth for CBA in the 2024 financial year.

Margins for all banks will remain under some pressure and while the latest May figures on loan growth are improved, they wouldn’t be considered particularly strong.

Nonetheless, in recent weeks CBA threatened BHP for the title of Australia’s most valuable company.

The Business Briefing newsletter delivers major stories, exclusive coverage and expert opinion. Sign up to get it every weekday morning.