Westpac Banking (WBC.AX)
Financials · ASX · Australia
Fundamentals
Valuation and ratings
Westpac Banking trades at A$36.37, close to the A$33.70 our discounted cash flow model puts on the business. On this measure the market and the model broadly agree, so the interesting question is which of them is wrong.
Our moat model scores it 46 out of 100, which is a moat, but not a deep one. A moat is a structural reason competitors cannot take the profits away, and it matters more to a long holding period than any single quarter's numbers do.
It changes hands at 18.0 times earnings. Be careful reading that in isolation: for a cyclical business a low P/E arrives at the top of the cycle, when profits are peaking and about to fall, which is exactly when the shares look cheapest and are not.
About Westpac Banking
Westpac Banking Corporation provides banking and other financial services in Australia, New Zealand, the Pacific Islands, Asia, the Americas, and Europe. It operates through the Consumer, Business & Wealth, Institutional, and New Zealand segments. The company offers bank accounts, home and personal loans, credit cards, international and travel banking services, insurance, superannuation, investments, share trading, margin lending, private banking, and online banking services; savings and transactions accounts, loans and finance, payment solutions, insurance for businesses, foreign exchange and international money transfer, commercial business and industry banking; bank guarantee, business digital wallet, business setup, and business term deposits; and corporate online banking, transaction banking, corporate and structured finance, and trade and supply chain finance services. It serves individuals and consumers; small to medium businesses and commercial and agribusiness customers; high-net-worth individuals; and corporate and institutional and government customers. The company was formerly known as Bank of New South Wales and changed its name to Westpac Banking Corporation in October 1982. Westpac Banking Corporation was founded in 1817 and is headquartered in Sydney, Australia.
WBC.AX passes 4 of our 30 screens today
Each screen prints the exact criteria it used, and the circumstances in which it is wrong.
Common questions
Is Westpac Banking (WBC.AX) undervalued?
Against our discounted cash flow estimate of A$33.70, WBC.AX at A$36.37 is 7% above fair value. That is one model's answer, not a recommendation, and most of a DCF's output sits in a terminal value nobody can forecast.
What is WBC.AX's P/E ratio?
WBC.AX trades at 18.0 times earnings. A low P/E is not automatically cheap: on a cyclical company it is usually a warning that earnings are at a peak.
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Data from company filings, exchange quotes and SEC EDGAR 13F disclosures. Quotes are delayed. Metrics we do not have are left out rather than estimated. Educational information, not financial advice.