Bank of Queensland Limited (In this update I’ll explain how simple it can be to provide a share price valuation of an ASX bank share such as ASX: BOQ ). That said, while it may seem ‘simple’ to create a valuation model of a business, no share valuation or forecast is guaranteed. If ‘value investing’ were as easy as what we’re about to show you, everyone would be rich!Our largest bank shares make up more than one-third of the local share market, measured by the market capitalisation of the largest 200 compan ...

Westpac Banking Corp (In this update I’ll explain how basic it can be to provide a share price valuation of an ASX bank share such as ASX: WBC ). That said, while it may seem ‘simple’ to create a valuation model of a business, no share valuation or forecast is guaranteed. If ‘value investing’ were as easy as what we’re about to show you, everyone would be rich!Our largest bank shares make up more than one-third of the local share market, measured by the market capitalisation of the largest 200 companies in ...

Core Insights - The share price of Bank of Queensland Limited (BOQ) is currently under scrutiny as ASX investors attempt to establish a rough valuation of the company [1][2] Valuation Methods - The Price-to-Earnings (PE) ratio is a common method for valuing bank shares, comparing the company's share price to its earnings per share [3] - A PE ratio of 15.9x for BOQ is calculated based on a share price of $6.52 and earnings per share of $0.41, which is lower than the banking sector average PE of 19x [5] - A sector-adjusted PE valuation for BOQ is estimated at $7.59 based on the average PE ratio of the banking sector [5] Dividend Discount Model (DDM) - The Dividend Discount Model (DDM) is a more robust valuation method for banks, using recent or forecasted dividends and a risk rate [6][7] - The formula for DDM valuation is Share price = full-year dividend / (risk rate – dividend growth rate) [8] - A valuation of BOQ shares using a blended growth and risk rate yields an average valuation of $7.19, with an adjusted dividend payment increasing the valuation to $7.40 [10] Gross Dividend Valuation - Considering fully franked dividends, a gross dividend payment forecast of $0.50 results in a valuation of $10.57 for BOQ shares [11] Growth and Risk Rate Analysis - Various growth and risk rate scenarios indicate a wide range of potential valuations, with a 6% risk rate and 4% growth rate yielding a valuation of $17.50 [12] Additional Considerations - Further research is necessary to assess the sustainability of net interest margins and regulatory compliance for non-interest income [13] - The management team's culture and effectiveness are also critical factors in long-term investment decisions [13]

Core Viewpoint - The valuation of Commonwealth Bank of Australia (CBA) shares is a significant concern for investors, particularly those interested in dividend income, with current share price around $155 [1][2]. Group 1: Investment Appeal of Bank Shares - Australian investors favor bank shares, including CBA, ANZ Banking Group, and Macquarie Group, due to their stability and dividend income potential [2][3]. - The banking sector operates in an oligopoly, with limited success from foreign competitors like HSBC in penetrating the market [3]. Group 2: Valuation Methods - The Price-Earnings (PE) ratio is a common method for valuing shares, comparing a company's share price to its earnings per share [4][5]. - CBA's current PE ratio is calculated at 27.5x, significantly higher than the banking sector average of 18x, leading to a sector-adjusted valuation of $102.65 [6]. Group 3: Dividend Discount Model (DDM) - The Dividend Discount Model (DDM) is highlighted as a more effective valuation method for banks, relying on past or forecasted dividends [7][8]. - Using last year's dividend of $4.65 and various risk rates, the DDM yields a valuation range for CBA shares between $98.33 and $100.66 [11][12]. - Adjusting for fully franked dividends, the valuation based on a gross dividend payment of $6.80 results in a share price valuation of $143.80 [12]. Group 4: Growth and Risk Assumptions - Different growth rates (2% to 4%) and risk rates (6% to 11%) yield varying valuations, indicating the sensitivity of the share price to these assumptions [13].

Core Insights - AbbVie Inc. is a leading pharmaceutical company set to report third-quarter earnings on October 31, 2025, with expected EPS of $1.77 and revenue of approximately $15.59 billion [1][6] - The company is rated as a Strong Buy, with anticipated revenue growth exceeding the sector median, supported by strong free cash flow margins and significant R&D investments [2][3] - AbbVie has consistently exceeded earnings expectations in the last four quarters, averaging an earnings surprise of 2.46%, although near-term profitability may be affected by high R&D expenses related to acquisitions [3] Valuation Metrics - AbbVie has a high price-to-earnings (P/E) ratio of approximately 107.36, indicating strong investor confidence as they are willing to pay over 107 times the company's earnings from the past twelve months [4][6] - The price-to-sales ratio is about 6.92, suggesting that investors are paying nearly 7 times the company's sales [4][6] - The current ratio is approximately 0.74, indicating potential challenges in covering short-term liabilities with short-term assets, yet the Dividend Discount Model suggests AbbVie is significantly undervalued with a potential 27% increase in stock price over the next year [5]

Core Insights - Bendigo & Adelaide Bank Ltd (ASX: BEN) is currently trading around $13, and analysts utilize various valuation tools to determine price targets for bank shares like BEN [1][3]. Valuation Models - The Price-Earnings Ratio (P/E) is a common tool used to compare a company's share price to its earnings per share, with a current P/E ratio for BEN calculated at 14.6x compared to the banking sector average of 20x [5][8]. - A sector-adjusted P/E valuation for BEN, based on its earnings per share of $0.87, results in a valuation of $17.46 [8]. - The Dividend Discount Model (DDM) is another approach that forecasts future dividends instead of profits, with the last year's dividend of $0.63 assumed to grow at a consistent rate [9][11]. Dividend Valuation - Using the DDM, the valuation of BEN shares is calculated at $13.32, and with an adjusted dividend payment of $0.65, the valuation increases to $13.75 [13]. - Considering fully franked dividends, the valuation based on a gross dividend payment of $0.93 results in a share price valuation of $19.64 [14]. Growth and Risk Assumptions - Different growth rates (2% to 4%) and risk rates (6% to 11%) yield varying valuations, with the highest valuation of $32.50 occurring at a 4% growth rate and a 6% risk rate [15]. - Simple valuation models can provide insights but are not perfect, and further analysis is recommended to improve valuation accuracy [15][16]. Financial Health Indicators - Monitoring the growth of total loans on the balance sheet is crucial, as rapid growth may indicate higher risk, while slow growth may suggest conservatism [17]. - Key areas to analyze include provisions for bad loans, assessment rules for bad loans, and sources of capital, with a focus on the cost of capital acquisition [18].

Summary of China Construction Bank Corp. Research Call Company Overview - **Company**: China Construction Bank Corp. (CCB) - **Ticker**: 0939.HK - **Market Cap**: Rmb1,798,235 million - **Current Share Price**: HK$7.75 (as of October 20, 2025) - **Price Target**: HK$9.50 - **Dividend Yield**: 5.8% [5][2] Industry Insights - **Industry**: China Financials - **Industry View**: Attractive [5] - **Expected Trends**: - Seasonal fund inflows are anticipated to support bank share prices, with more upside expected towards the end of 2025 [2] - Moderate but steady credit demand is expected to stabilize financial asset yields and bank net interest margin (NIM), supporting revenue and profit growth in upcoming quarters [2] Financial Performance Expectations - **3Q25 Outlook**: Positive profit growth is expected for CCB, driven by a rebound in fee income and a narrowing of NIM contraction [2] - **Profit Growth Probability**: Estimated probability of 70% to 80% for positive profit growth scenario [3] Valuation Methodology - **Valuation Model**: 3-stage dividend discount model - **Discount Rate**: 10.0% in the base case - **Second-stage ROE**: 8.7% - **Long-term ROE**: 8.1% - **Long-term Dividend Payout Ratio**: 32% [8] Risks and Considerations - **Upside Risks**: - Reduction in policy intervention amid a rapid rebound in business fundamentals - Higher-than-expected non-interest income from a stronger equity market [11] - **Downside Risks**: - Further slowdown in China's macro economy - Accelerated deposit rate deregulation - Increased credit risk from SME loans as CCB shifts loan allocation to inclusive finance - Large social responsibility as a state-owned bank [11] Key Financial Metrics - **Average Daily Trading Value**: HK$2,323 million - **52-Week Price Range**: HK$8.56 - HK$5.80 [5] Analyst Ratings - **Stock Rating**: Overweight [5] - **Analysts Involved**: Richard Xu, CFA; Chiyao Huang [4] Conclusion - CCB is positioned for potential growth in the near term, supported by favorable market conditions and a solid dividend yield. However, investors should remain cautious of macroeconomic risks and the bank's evolving credit risk profile.

Core Insights - Bank of Queensland Limited (BOQ) is one of Australia's largest regional banks, operating nearly 200 branches, many of which are run by owner-managers, indicating a unique business model focused on small business ownership [1] - The current share price of BOQ is approximately $7.22, raising questions about its valuation in the market [1][11] Financial Performance - BOQ's net interest margin (NIM) is 1.56%, which is below the ASX major banks' average of 1.78%, indicating lower profitability from lending compared to peers [5][6] - The return on equity (ROE) for BOQ is 4.7%, significantly lower than the sector average of 9.35%, suggesting less efficient use of shareholder equity [7] - The common equity tier one (CET1) ratio for BOQ is 10.7%, which is also below the sector average, highlighting potential concerns regarding capital adequacy [8] Dividend Analysis - The total dividend for BOQ last year was $0.34, with projections suggesting a growth rate between 2% and 4% [10] - Using a dividend discount model (DDM), the estimated average valuation of BOQ shares is $7.19, while an adjusted valuation based on expected future dividends raises this to $7.40 [11] - Considering fully franked dividends, the 'fair value' forecast for BOQ shares could be as high as $10.57, indicating potential undervaluation based on dividend benefits [11][12]

Core Viewpoint - The article discusses the valuation of bank shares in Australia, particularly focusing on Bendigo & Adelaide Bank Ltd (ASX: BEN) and ANZ Banking Group, emphasizing the importance of dividend history and franking credits in investment decisions [1][2]. Valuation Techniques - The Price-Earnings (PE) ratio is a common method used to value bank shares, comparing a company's share price to its earnings per share [3][4]. - Analysts often compare a company's PE ratio with its competitors to assess whether the share price is overvalued or undervalued [4]. - The principle of mean reversion is applied to calculate a sector-adjusted PE valuation by multiplying profits per share by the sector average PE ratio [4][5]. Dividend Discount Model (DDM) - The DDM is highlighted as a suitable valuation method for banks due to their stable dividend payments, contrasting with growth-focused industries like technology [6][7]. - Key inputs for the DDM include the dividend per share, annual growth rate (assumed at 2%), and the required return rate (assumed between 6% and 11%) [7][9]. - The valuation formula for DDM is Share Price = Full-Year Dividend / (Risk Rate - Dividend Growth Rate), and it is recommended to calculate with various growth and risk rate assumptions [8]. ANZ Share Valuation - The current share price of ANZ is $35.46, with a calculated PE ratio of 16.5x, compared to the banking sector average of 20x, leading to a sector-adjusted PE valuation of $42.35 [5]. - Using the DDM approach, ANZ shares are valued at $35.10, which increases to $35.74 with an adjusted dividend payment of $1.69 [10]. - Various growth and risk rate scenarios yield a range of valuations, indicating the sensitivity of share price to these assumptions [10]. Investment Considerations - Analysts emphasize the importance of qualitative research, including understanding growth strategies, economic indicators, and consumer sentiment, before conducting quantitative analysis [11].

Core Viewpoint - The article discusses the valuation of Westpac Banking Corp (WBC) shares, highlighting the importance of understanding both the price-earnings (PE) ratio and the dividend discount model (DDM) for potential investors [1][7]. Valuation Methods - The PE ratio is a common tool for valuing shares, comparing a company's share price to its earnings per share, with WBC's current PE ratio calculated at 20.5x against a sector average of 20x [4][6]. - A sector-adjusted PE valuation for WBC shares is derived by multiplying the earnings per share ($1.92) by the sector average PE ratio, resulting in a valuation of $38.08 [6]. Dividend Discount Model (DDM) - The DDM is presented as a more effective valuation method for banks, relying on recent or forecasted dividends and assuming consistent or modest growth [8][10]. - Using last year's dividend payment of $1.66 and a blended risk rate between 6% and 11%, the DDM yields a valuation range for WBC shares from $34.05 to $48.64 when considering gross dividends [11][12]. Growth and Risk Rates - Different growth and risk rate assumptions yield varying valuations, with a 2% growth rate and a 6% risk rate resulting in a valuation of $40.25, while an 11% risk rate drops the valuation to $17.89 [13]. Market Context - The financial/banking industry is favored by Australian investors, particularly for dividend income, with major banks operating in an oligopoly, making them less susceptible to foreign competition [3].