Is Canara Bank overvalued or undervalued?

As of 30 October 2024, Canara Bank's valuation grade has moved from fair to very attractive, indicating a significant improvement in its perceived value. The bank is currently considered undervalued, supported by a PE ratio of 6.16, a Price to Book Value of 1.05, and a PEG ratio of 0.36. These metrics suggest that the bank is trading at a lower valuation compared to its earnings growth potential.
In comparison to its peers, Canara Bank's PE ratio is notably lower than that of State Bank of India, which stands at 10.23, and it also outperforms IDBI Bank, which is rated fair with a PE of 14.44. Other attractive peers include Punjab National Bank with a PE of 7.61 and Bank of Baroda at 6.50, reinforcing Canara Bank's favorable positioning in the market. Additionally, Canara Bank has shown strong performance relative to the Sensex, particularly over the past month with a return of 21.56% compared to the Sensex's 3.88%, further highlighting its undervalued status.