Are WBC shares worth considering in September?

Core Viewpoint - Westpac Banking Corp's share price is under scrutiny as ASX investors attempt to establish a target valuation for the company [1][2] Valuation Methods - The PE ratio is a key metric for valuing bank shares, comparing share price to earnings per share [3] - Three methods to utilize the PE ratio include intuitive buying/selling thresholds, comparing with sector averages, and calculating a valuation based on expected earnings and a chosen PE multiple [4] Current Financial Metrics - Westpac's current share price is $38.88, with earnings per share of $1.92, resulting in a PE ratio of 20.3x, which is above the banking sector average of 19x [5] - A sector-adjusted PE valuation for Westpac is calculated at $37.29 [5] Dividend Discount Model (DDM) - The DDM is a robust valuation method for banks, using recent or forecasted dividends and a risk rate to estimate share price [6][7] - The formula for DDM valuation is Share price = full-year dividend / (risk rate – dividend growth rate) [8] - Valuations using a blended growth and risk rate yield a range of values, with a base valuation of $35.10 and an adjusted valuation of $34.05 based on different assumptions [10] Gross Dividend Valuation - Considering fully franked dividends, a gross dividend payment forecast of $2.30 results in a valuation of $48.64 for Westpac shares [11] Growth and Risk Rate Analysis - Various growth and risk rate scenarios yield a range of valuations, with significant differences based on assumptions [12] Additional Considerations - Investors should also evaluate net interest margins, regulatory impacts on non-interest income, and the management team's effectiveness when analyzing Westpac [13]