The big four ASX bank shares have seen a fair amount of volatility since the start of 2024, as the chart below shows. After everything that has happened, investors may be wondering if there's one that's more appealing than the rest.
At first glance, they all appear to offer similar services – mortgages, term deposits, savings accounts, business banking and so on.
But, interestingly, the market has decided to price them at different multiples of their profit. The higher the price/earnings (P/E) ratio, the higher the quality of those earnings. A higher P/E ratio can also indicate that the market expects more growth from that business.
Let's have a look at what valuation the banks could be trading on.
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Big 4 ASX bank share valuations
Using the (independent) forecasts on Commsec:
The Commonwealth Bank of Australia (ASX: CBA) share price is valued at 22x FY26's estimated earnings.
The Westpac Banking Corp (ASX: WBC) share price is valued at 14x FY26's estimated earnings.
The National Australia Bank Ltd (ASX: NAB) share price is valued at 14x FY26's estimated earnings.
The ANZ Group Holdings Ltd (ASX: ANZ) share price is valued at 11x FY26's estimated earnings.
It looks as though CBA shares are trading materially more expensive than Westpac and NAB shares and twice as expensive as ANZ shares.
However, the size of the P/E ratio doesn't automatically tell us which one is better value. One ASX bank may do a better job of growing earnings after FY26. CBA is seen as the domestic bank with the highest return on equity (ROE), which could affect future shareholder returns.
Let's look at which bank experts view as the best option.
Analyst ratings
According to a collection of ratings collated by Commsec for ANZ shares, there are currently two buy ratings, seven hold ratings, and two sell ratings.
For NAB shares, there is one buy rating, seven hold ratings and five sell ratings.
With Westpac shares, there is one buy rating, four hold ratings and eight sell ratings.
On CBA shares, there are no buy ratings, one hold rating and 13 sell ratings.
Overall, it seems analysts are the most bullish on ANZ shares, but even here, the average view isn't particularly optimistic.
