How did the Westpac (ASX:WBC) share price perform in October?

How did the bank’s shares travel last month?

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The Westpac Banking Corp (ASX: WBC) share price had a relatively uneventful month of October. The company’s shares continued to tread close to its 52-week high of $27.12, before plummeting on 1 November.

At Wednesday’s closing bell, the bank’s shares began to recoup some losses by edging 0.09% higher to $23.15.

How did Westpac shares fare in October?

Investors remained undecided during October as Westpac shares went through a horizontal channel. This came despite the company releasing a price-sensitive market announcement advising of notable items affecting its second-half profit.

The news appeared to barely both shareholders, with Westpac shares falling just 1.65% that day to $25.63.

For the month, the bank’s shares dipped just under 1%, which fared worse than the S&P/ASX 200 Index (ASX: XJO). The benchmark index rose by 2% in value over the period.

However, while last month seemed quiet, the company’s release of its full-year results on November 1 had a detrimental impact on its shares.

Westpac revealed a step in the right direction with increases across key metrics. But the financial scorecard missed the mark with investors who were expecting more. This led the company’s shares to sink 7.36% to $23.78 apiece.

In addition, Australia’s oldest bank stated that it is conducting a $3.5 billion off-market share buyback.

What do the brokers say?

Following the FY21 results, a number of brokers weighed in on the company’s share price.

Analysts at Morgan Stanley downgraded their outlook to an “equal weight” rating from “overweight” for the Westpac share price. The broker cut its price target by 14% to $24.80.

Goldman Sachs also reassessed their rating, reducing the view on Westpac shares by 11% to $25.60. Based on the current share price, this implies an upside of approximately 10%.

The most recent note came from multinational investment bank, Bell Potter. The firm discounted Westpac shares by 4.1% to a 12-month price target of $26.

Westpac share price summary

Over the past 12 months, the Westpac share price has gained around 30% in value. It is also up by about 20% this year to date. Although, when looking over a 5-year time frame, Westpac shares are down by more than 20%.

Westpac has a price-to-earnings (P/E) ratio of 21.98 and commands a market capitalisation of roughly $87.24 billion.

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Motley Fool contributor Aaron Teboneras has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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