After smashing the benchmark in 2024, Commonwealth Bank of Australia (ASX: CBA) shares are again outpacing the S&P/ASX 200 Index (ASX: XJO) in these first six trading weeks of 2025.

Shares in the ASX 200 bank stock are dipping lower today, down 0.1% at $162.60. However, shares are up 5.9% year to date, handily beating the ASX 200's 3.7% gains.

As for the past 12 months, CBA shares have gained a whopping 40.5% compared to the 11.8% gains delivered by the benchmark index.

And that's not including the $4.65 in full-franked dividends the big four bank paid out over the year.

Indeed, it's these reliable and historically sizeable dividends that have attracted passive income investors to the stock for many years.

But with the CBA share price on a tear and hitting new all-time highs just last week, the stock's dividend yields have come well down. CommBank stock currently trades on a fully franked trailing dividend yield of only 2.9%.

Heading the other direction is the big bank's price-to-earnings (P/E) ratio, which is running north of 28 times.

As such, tomorrow will be a big day, with CBA reporting its half-year results. Shareholders will be watching closely to see how the bank aims to increase its earnings moving forward to justify its lofty valuations.

But whether investing for passive income or capital gains, investors may want to consider taking profit on their CommBank stock.

Time to sell CBA shares?

Novus Capital's John Edwards has as a sell recommendation on CBA shares (courtesy of The Bull).

"The CBA is a high-quality bank, but it's not a growth stock, in my opinion," Edwards said.

According to Edwards:

Cash earnings of $9.836 billion in full year 2024 actually fell 2% on the prior corresponding period. Share price upside has surprised many market watchers after rising from $114.55 on February 7, 2024, to trade at $160.81 on February 6, 2025.

And that meteoric share price rise poses a potential problem, especially for passive income investors.

Edwards said:

In our view, the stock is expensive. Investors chasing a good dividend yield should consider taking a profit in CBA before investing the proceeds in higher yielding non-bank stocks.

Edwards has a price target of $110 on CBA shares, representing a potential downside of more than 32% from current levels.

Also bearish on CommBank stock

Morgans' Damien Nguyen also has a sell recommendation on the ASX 200 bank stock (courtesy of The Bull). But not because it's a poor business.

"CBA is the highest quality of the big four banks, in our view," Nguyen said.

So why sell CBA shares?

Nguyen explained:

The banking sector was a safe haven for investors in 2024. However, in our opinion, CBA's valuation is excessive relative to other banks. Its valuation is trading significantly higher than historical averages, which raises concerns about whether it can be sustained at such high levels.

We suggest investors take profits and look to redeploy their capital in stocks offering more appealing value.