Should you buy CBA, Telstra, and Wesfarmers shares?

The Australian share market is home to a number of high-quality shares.

But just because they are high quality doesn't necessarily mean that they are buys. Like Warren Buffett once quipped: "Price is what you pay, value is what you get."

With that in mind, let's see if analysts think some of the biggest ASX shares are good value at current levels.

Commonwealth Bank of Australia (ASX: CBA)

As Australia's largest bank, Commonwealth Bank needs little introduction. It has built a reputation for resilient earnings and dependable dividend payouts, making it a cornerstone in many portfolios.

Despite often trading at a premium, CBA has been able to deliver strong shareholder returns thanks to its market dominance, cost efficiency, and prudent capital management. Its dividends are fully franked and supported by robust profitability.

However, the premium that CBA shares trade on right now is just too rich for analysts. In fact, all the major brokers have sell ratings on Australia's largest bank with price targets implying potential downside of 30% to 45%.

For example, Morgans has a reduce rating and lowly $97.49 price target. As a result, income investors may want to keep clear of this one until it trades with a much fairer valuation.

Telstra Group Ltd (ASX: TLS)

Telstra is a popular ASX share among retirees and income-focused investors. And this is for good reason.

Following years of network investment and cost restructuring, the telco has re-established itself as a steady dividend payer. With a growing presence in 5G and a leaner operation, Telstra is aiming to grow its earnings and dividends at a solid and sustainable rate over the coming years.

And with its shares currently trading with an estimated fully franked dividend yield around 4%, Macquarie thinks now is a good time to invest. The broker currently has an outperform rating and $5.28 price target on the telco giant's shares.

Wesfarmers Ltd (ASX: WES)

Wesfarmers is the conglomerate behind Bunnings, Kmart, Officeworks, and many more businesses.

It has a long history of growing its earnings and paying reliable dividends through various economic cycles. This is because Wesfarmers' exposure to retail, chemicals, and industrial businesses helps spread risk and supports its ability to deliver consistent earnings year after year.

But with its shares up 24% since this time last year, most analysts believe they are fully valued now. One of those is Macquarie, which has a neutral rating and $80.00 price target on Wesfarmers' shares. This is a touch below where it currently trades.

The post Should you buy CBA, Telstra, and Wesfarmers shares? appeared first on The Motley Fool Australia.

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has positions in and has recommended Macquarie Group and Wesfarmers. The Motley Fool Australia has positions in and has recommended Macquarie Group and Telstra Group. The Motley Fool Australia has recommended Wesfarmers. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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