ASX (ASX:ASX) Valuation in Focus as CBOE Approval Reshapes Australian Equity Market Dynamics

CBOE Australia winning approval to list companies marks a turning point for the Australian market. This move directly challenges ASX (ASX:ASX)'s decades-long leadership in equity listings and sets the stage for deeper competition and innovation.

See our latest analysis for ASX.

ASX shares have been under pressure in 2025, with the stock recording a year-to-date share price decline of 11.3% and a 1-year total shareholder return of -10.1%. This reflects market caution even as big changes reshape Australia’s financial landscape. Short-term momentum remains weak as investors weigh the implications of multi-exchange competition and potential growth opportunities for the sector.

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But with the ASX trading below analyst targets and facing fresh pressure from this new market dynamic, the question is whether there is real value on offer or if the market has already factored in the challenges and future growth potential.

Most Popular Narrative: 12.9% Undervalued

ASX’s consensus narrative places fair value at A$66.51, about 13% above the last close price of A$57.92. This indicates analysts see upside, banking on margin stability and modernization to support future returns.

Technology modernization and regulated pricing enhance operational efficiency and net profit stability, mitigating risks from competition and regulatory changes.

Read the complete narrative.

Want the story behind this high valuation? The answer involves significant projected increases in future earnings and a premium multiple rarely seen among market-exchange stocks. Find out what specific financial forecasts power this ambitious estimate and see why analysts believe ASX's transformation could drive value.

Result: Fair Value of $66.51 (UNDERVALUED)

Have a read of the narrative in full and understand what's behind the forecasts.

However, intensifying regulatory scrutiny and rising technology costs could quickly undermine margin stability and challenge analysts' optimistic outlook for ASX shares.

Find out about the key risks to this ASX narrative.

Another View: Multiples Tell a Different Story

Looking at ASX through the price-to-earnings lens, the stock trades at 22.4x, slightly above the Capital Markets industry average of 22x and well above a fair ratio of 18.1x. This premium suggests investors are paying extra for stability, but it also raises valuation risk if growth falters. Is the market rewarding quality, or just pricing in too much optimism?

See what the numbers say about this price — find out in our valuation breakdown.

Build Your Own ASX Narrative

If you have a different perspective or want to dive deeper into the numbers yourself, you can build your own narrative from scratch in just a few minutes, and Do it your way.

A great starting point for your ASX research is our analysis highlighting 1 key reward and 2 important warning signs that could impact your investment decision.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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