2 easy ways to value the BOQ share price

Core Insights - The Bank of Queensland Limited (ASX: BOQ) share price is currently trading at approximately $7.27, making it one of the most actively traded shares on the ASX [1] - ASX bank shares constitute about one-third of the Australian stock market in terms of market capitalization and the All Ordinaries Index [1] Valuation Methods - The Price-to-Earnings (PE) ratio for BOQ is calculated to be 17.7x, compared to the banking sector average PE of 20x [4] - A sector-adjusted PE valuation for BOQ shares is estimated at $8.03 based on the average PE ratio of the banking sector [5] - The Dividend Discount Model (DDM) is highlighted as a robust method for valuing bank shares, taking into account consistent dividend payments [6][7] - Using the DDM formula, the valuation of BOQ shares is calculated at $7.19, with an adjusted dividend payment leading to a valuation of $7.40 [10] - When considering fully franked dividends, the valuation based on a forecast gross dividend payment of $0.50 results in a share price valuation of $10.57 [11] Growth and Risk Assumptions - Various growth rates (2% to 4%) and risk rates (6% to 11%) yield different valuations for BOQ shares, with the highest valuation reaching $17.50 at a 4% growth rate and 6% risk rate [12] - Analysts are encouraged to conduct extensive qualitative research, including assessments of growth strategies and economic indicators, before finalizing their valuation models [13]