The Westpac Banking Corp (ASX: WBC) share price ended August in the green — the only major ASX bank share to do so from the close of July trading.
Westpac gained 0.46% to close the month at $21.61 and hit an intra-month high of $22.66. This share price outperformed all other major bank shares over this period, with Australia & New Zealand Banking Group Ltd (ASX: ANZ) down 0.3% to $22.83 and National Australia Bank Ltd (ASX: NAB) down 0.03% to $30.60.
Westpac also beat the performance of Commonwealth Bank of Australia (ASX: CBA) by a wide margin — CBA shares slumped 3.27% to $100.77 each.
Additionally, Westpac beat the S&P/ASX 200 Banks Index (ASX: XBK), which made a 1.51% loss for the month.
Let's go over what happened amid the surge in green for the Westpac share price.
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How did Westpac outperform the other ASX banking shares?
The banking giant released little price-sensitive news to support the outperformance of the Westpac share price.
The only announcement of note was the bank's Q3 update, which it posted on August 16. However, it was not well received, and shares dipped 1% that day.
But in better news, brokers have been bullish on the Westpac share price.
Goldman Sachs believed Westpac could hit a new 52-week high over the next year and gave it a price target of $26.55, implying a 25% potential upside on the current price of $21.18.
In their analysis, Goldman Sachs analysts believed Westpac to be undervalued due to its potential for net interest rising, cost reduction initiatives and digital mortgage loans. More broadly, Goldman Sachs also said Westpac's cheap share price is a major reason it will increase in the future.
The broker said:
On our revised forecasts and target prices, WBC now offers the most upside of the banks over the next 12 months. Beyond this, we note the stock is trading at a 20% discount to peers, versus the historic average 2% discount.
Additionally, the team at Citi is also bullish on the Westpac share price. A recent note revealed that its analysts have a buy rating and $29 price target on its shares.
Investment bank Morgan Stanley stated that it expects Westpac to pay fully franked dividends per share of $1.25 in FY22 and $1.30 in FY23. The company's current quarterly dividend amount stands at 30 cents per share.
Westpac share price snapshot
The Westpac share price is down almost 1% year to date and 19% over the past 12 months. By comparison, the S&P/ASX 200 Index (ASX: XJO) is down around 8% and 9%, respectively, over the same timeframes.
It should be noted that NAB is the only one of the big four banks to record gains over those periods, up 4% and 6%, respectively. The ANZ share price is the worst performer, down 18% year to date and 19% in a year.
Westpac has a market capitalisation of $75.66 billion.
