We’ve recently updated our valuation analysis.

Westpac Banking Valuation

Is WBC undervalued compared to its fair value, analyst forecasts and its price relative to the market?

Valuation Score

2/6

Valuation Score 2/6

  • Price-To-Earnings vs Peers

  • Price-To-Earnings vs Industry

  • Price-To-Earnings vs Fair Ratio

  • Below Fair Value

  • Significantly Below Fair Value

  • Analyst Forecast

Key Valuation Metric

Which metric is best to use when looking at relative valuation for WBC?

Other financial metrics that can be useful for relative valuation.

WBC key valuation metrics and ratios. From Price to Earnings, Price to Sales and Price to Book to Price to Earnings Growth Ratio, Enterprise Value and EBITDA.
Key Statistics
Enterprise Value/Revenuen/a
Enterprise Value/EBITDAn/a
PEG Ratio2.1x

Price to Earnings Ratio vs Peers

How does WBC's PE Ratio compare to its peers?

The above table shows the PE ratio for WBC vs its peers. Here we also display the market cap and forecasted growth for additional consideration.
CompanyPEEstimated GrowthMarket Cap
Peer Average11.8x
ANZ Australia and New Zealand Banking Group
10.1x1.3%AU$71.8b
NAB National Australia Bank
13.7x2.9%AU$96.4b
CBA Commonwealth Bank of Australia
18.4x3.1%AU$178.1b
BFL BSP Financial Group
5.3xn/aAU$2.3b
WBC Westpac Banking
14.5x7.0%AU$82.4b

Price-To-Earnings vs Peers: WBC is expensive based on its Price-To-Earnings Ratio (14.5x) compared to the peer average (11.8x).


Price to Earnings Ratio vs Industry

How does WBC's PE Ratio compare vs other companies in the Global Banks Industry?

0 CompaniesPrice / EarningsEstimated GrowthMarket Cap
Industry Avg.n/a3.6%
n/an/an/a

Price-To-Earnings vs Industry: WBC is expensive based on its Price-To-Earnings Ratio (14.5x) compared to the Global Banks industry average (9.2x)


Price to Earnings Ratio vs Fair Ratio

What is WBC's PE Ratio compared to its Fair PE Ratio? This is the expected PE Ratio taking into account the company's forecast earnings growth, profit margins and other risk factors.

WBC PE Ratio vs Fair Ratio.
Fair Ratio
Current PE Ratio14.5x
Fair PE Ratio12.1x

Price-To-Earnings vs Fair Ratio: WBC is expensive based on its Price-To-Earnings Ratio (14.5x) compared to the estimated Fair Price-To-Earnings Ratio (12.1x).


Share Price vs Fair Value

What is the Fair Price of WBC when looking at its future cash flows? For this estimate we use a Discounted Cash Flow model.

Below Fair Value: WBC (A$23.57) is trading below our estimate of fair value (A$30.78)

Significantly Below Fair Value: WBC is trading below fair value by more than 20%.


Analyst Price Targets

What is the analyst 12-month forecast and do we have any statistical confidence in the consensus price target?

The above table shows the analyst WBC forecast and predictions for the stock price in 12 month’s time.
DateShare PriceAverage 1Y Price TargetDispersionHighLow1Y Actual priceAnalysts
CurrentAU$23.57
AU$24.98
+6.0%
14.0%AU$30.00AU$19.00n/a15
Dec ’23AU$23.92
AU$24.98
+4.4%
14.0%AU$30.00AU$19.00n/a15
Nov ’23AU$24.32
AU$25.05
+3.0%
13.8%AU$30.00AU$17.95n/a16
Oct ’23AU$20.64
AU$24.47
+18.5%
13.0%AU$30.00AU$17.95n/a17
Sep ’23AU$21.23
AU$24.36
+14.7%
12.8%AU$30.00AU$17.95n/a17
Aug ’23AU$21.66
AU$24.23
+11.8%
12.9%AU$30.00AU$18.15n/a17
Jul ’23AU$19.42
AU$24.47
+26.0%
12.3%AU$30.00AU$18.15n/a17
Jun ’23AU$24.10
AU$25.60
+6.2%
8.7%AU$30.00AU$21.50n/a17
May ’23AU$23.87
AU$24.92
+4.4%
11.1%AU$30.00AU$19.25n/a17
Apr ’23AU$23.95
AU$24.81
+3.6%
11.6%AU$30.00AU$19.10n/a17
Mar ’23AU$22.96
AU$24.67
+7.5%
11.8%AU$30.00AU$19.10n/a17
Feb ’23AU$20.40
AU$24.33
+19.3%
12.4%AU$31.50AU$19.20n/a15
Jan ’23AU$21.35
AU$24.94
+16.8%
11.4%AU$31.50AU$19.20n/a15
Dec ’22AU$20.62
AU$25.61
+24.2%
9.3%AU$31.50AU$23.00AU$23.9215
Nov ’22AU$23.78
AU$26.18
+10.1%
9.6%AU$31.50AU$23.00AU$24.3216
Oct ’22AU$25.41
AU$27.86
+9.6%
7.7%AU$31.50AU$24.00AU$20.6414
Sep ’22AU$26.11
AU$28.11
+7.7%
6.9%AU$31.50AU$24.20AU$21.2313
Aug ’22AU$24.52
AU$27.91
+13.8%
7.3%AU$31.50AU$24.20AU$21.6613
Jul ’22AU$25.65
AU$27.87
+8.6%
8.5%AU$31.50AU$22.50AU$19.4213
Jun ’22AU$26.20
AU$27.28
+4.1%
11.2%AU$31.50AU$20.00AU$24.1014
May ’22AU$24.98
AU$25.51
+2.1%
12.7%AU$29.50AU$18.79AU$23.8714
Apr ’22AU$24.54
AU$24.97
+1.8%
11.5%AU$29.50AU$18.79AU$23.9514
Mar ’22AU$24.19
AU$24.62
+1.8%
11.2%AU$29.50AU$18.79AU$22.9615
Feb ’22AU$21.21
AU$22.55
+6.3%
12.7%AU$27.00AU$15.00AU$20.4015
Jan ’22AU$19.37
AU$21.46
+10.8%
12.4%AU$27.00AU$15.00AU$21.3515
Dec ’21AU$20.28
AU$21.03
+3.7%
12.4%AU$27.00AU$15.00AU$20.6215

Analyst Forecast: Target price is less than 20% higher than the current share price.


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