The Westpac share price is down 6% this month, should you buy the dip?

Is Australia's oldest bank a top option for investors after recent weakness?

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In late afternoon trade, the Westpac Banking Corp (ASX: WBC) share price is on course to end the week in the red.

At the time of writing, the banking giant's shares are down 0.8% to $21.16.

This latest decline means the Westpac share price is now down over 6% since the start of the month.

Should you buy the Westpac share price dip?

If the broker community is to be believed, this recent pullback could be a great buying opportunity for investors.

For example, analysts at Citi currently have a buy rating and $30.00 price target on the bank's shares. Based on the current Westpac share price, this implies potential upside of almost 42% for investors over the next 12 months.

In response to its first-quarter update, Citi said:

It is difficult to draw definitive conclusions from a Pillar 3 release, but we conclude that WBC is tracking broadly in-line with Citi's and consensus expectations.

Elsewhere, Goldman Sachs currently has a conviction buy rating and $27.74 price target on its shares. This suggests potential upside of 31% for investors. Goldman believes Westpac is well-placed for growth thanks to rising interest rates and its cost cutting. It said:

WBC's shorter-duration replicating portfolio, and current balance sheet performance, should see its NIM outperform peers, [and] despite WBC recently revising its FY24E cost target to A$8.6 bn (from A$8.0 bn), the bank's performance on cost management remains strong in this inflationary environment with a 9% step down in underlying costs expected over the next two years.

Finally, Morgans is positive and has an add rating and $25.80 price target, implying potential upside of 22%. It commented:

We view WBC as having the greatest potential for return on equity improvement amongst the major banks if its business transformation initiatives prove successful.

Motley Fool contributor James Mickleboro has positions in Westpac Banking. 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 recommended Westpac Banking. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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