What's the outlook for Westpac shares in 2024?

Will 2024 be a good year for shareholders of Australia's oldest bank?

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It has been a reasonably disappointing year for Westpac Banking Corp (ASX: WBC) shares.

Since the start of the year, the banking giant's shares have lost over 6% of their value.

This has been driven by an underwhelming performance in FY 2023 and the scrapping of its bold cost-cutting plans.

But could things be better next year? Let's see what could be on the cards for Westpac shares in 2024.

2024 outlook for Westpac shares

I have good news and bad news for shareholders.

The bad news is that there aren't many analysts that are bullish on Westpac shares. The good news is that most brokers see limited downside risk from current levels.

For example, a recent note out of UBS reveals that its analysts have a sell rating and a $21 price target on its shares. This implies a potential downside of only 4% from current levels.

Elsewhere, Morgans has a hold rating and a $21.51 price target, which suggests a downside of under 2%.

One outlier, and a beacon of hope for shareholders, is Ord Minnett. It has an accumulate rating and a $28 price target on the bank's shares. If the Westpac share price were to rise to that level, it would mean a stunning return of approximately 28% for investors in 2024.

What about dividends?

One thing that brokers agree on is that next year should see some big dividend yields from Westpac's shares.

The consensus estimate is for a fully franked dividend of approximately $1.44 per share in FY 2024. Based on the current Westpac share price of $21.91, this would mean a very generous dividend yield of 6.6% for investors.

All in all, 2024 looks reasonably uncertain for shareholders. But time will tell which brokers make the right call on its shares.

Motley Fool contributor James Mickleboro has positions in Westpac Banking Corporation. 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 Scott Phillips.

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