The Westpac Banking Corp (ASX: WBC) share price was well and truly out of form in November.
The banking giant's shares were among the worst performers on the S&P/ASX 200 Index (ASX: XJO) last month with a 20.1% decline.
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What happened to the Westpac share price?
Investors were selling down the Westpac share price last month following the release of its full year results.
For the 12 months ended 30 September, Australia's oldest bank reported a 138% increase in statutory net profit to $5,458 million and a 105% jump in cash earnings to $5,352 million.
As strong as this looks on paper, it was still a touch short of the market's expectations. As was the announcement of a $3.5 billion off-market share buyback.
However, that was not the real reason for the Westpac share price weakness. That weakness was driven largely by management's net interest margin outlook.
Westpac's CEO, Peter King, commented: "For our business, loan growth is expected to be sound as the economy rebounds, although net interest margins will remain under pressure from low interest rates and competition."
Combined with similarly cautious margin commentary from fellow retail-focused bank Commonwealth Bank of Australia (ASX: CBA), analysts were quick to downgrade Westpac's shares and suggest investors switch to business banking-focused banks.
The teams at Credit Suisse, Goldman Sachs, and Morgan Stanley were among those that downgraded Westpac's shares following its results.
Is this a buying opportunity?
One leading broker that sees a lot of value in the Westpac share price following the selloff is Morgans.
It currently has an add rating and $30.50 price target on the bank's shares. This implies potential upside of approximately 48% for investors. The broker also expects a generous fully franked 6% dividend yield in FY 2022 based on the current Westpac share price.
Morgans commented: "We find the management of the margin-volume tradeoff in Australian home lending in FY21 to be disappointing and we hope for better management of this tradeoff going forward. Having said this, our view has been that the stock was not being priced for perfection and was offering considerable value. While the NIM has now re-based notably lower, we continue to see considerable value in the stock particularly due to our expectation of significant cost out by FY24F."
