Westpac Banking Corporation (ASX: WBC) shares have fallen in the last month, but is this a buying opportunity?
Westpac shares have descended 4.4% from $22.25 at market close on 24 April to $21.26 at the time of writing. For perspective, the S&P/ASX 200 (ASX: XJO) has slipped 0.86% in the same time frame.
Let's take a look at the outlook for this ASX 200 bank share.
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Is Westpac a buy?
Westpac shares are a "buy " according to Baker Young managed portfolio analyst Toby Grimm. He noted the company's 2023 half-year result, dividend yield and valuation.
Commenting on The Bull, he said:
This bank has underperformed its major peers by an average of 33 per cent during the past five years. Following a better-than-expected 2023 half year result, we see attractive relative value and dividend yield.
Cost pressures continue to be a major detractor, but they are a controllable factor.
Westpac reported a net profit of $4 billion in the first half of FY23, up 22% on the prior corresponding half.
The dividend per share, fully franked, lifted 15% on the first half of FY22 to 70 cents per share.
On the flip side, the team at Morgan Stanley has recently slashed Westpac to equal weight. The broker cut its 12-month price target on all of the big four ASX 200 bank shares.
The team cut Westpac's price target to $21, implying a 5.6% downside.
However, Goldman Sachs is still recommending investors buy Westpac shares due to its net interest margin (NIM) and cost outlook. Goldman said:
We view WBC's NIM management in the half as a positive relative to peers, in particular having achieved an exit NIM that was flat versus 2Q23 average in contrast with peers who saw continued deterioration.
Despite WBC walking away from its FY24E cost target of A$8.6 bn, we expect a broadly flat cost trajectory over the next two years, which will see WBC outperform peers in this relatively difficult inflationary environment.
Westpac share price snapshot
The Westpac share price has shed 9% in the last year.
Westpac has a market cap of around $74 billion based on the latest closing share price.
