Despite today's intraday 0.3% slip to $33.92 a share, Westpac Banking Corp (ASX: WBC) shares remain some of the top performers over the past year.
In fact, shares in the S&P/ASX 200 Index (ASX: XJO) bank stock have surged 38.5% in 12 months, or more than three times the 11.4% one-year gains posted by the ASX 200.
Atop those outsized gains, Westpac stock also trades on a fully franked trailing dividend yield of 4.9%.
Clearly, you'll be hard-pressed to find any stockholders complaining about the past year's returns.
But with an eye on the year ahead, Argonaut's Harrison Massey thinks investors would do well to sell their Westpac shares now (courtesy of The Bull).
Image source: Getty Images
Time to sell Westpac shares?
"Westpac, much like the other big three Australian banks, has benefited immensely from index and superannuation fund buying," Massey said.
He added, "Despite Westpac's share price strength, the bank is trading on unrealistically high price/earnings multiples, in our view."
Indeed, Westpac shares currently trade at a P/E ratio of around 17.5 times.
And Massey pointed to concerns that lower interest rates could throw up headwinds for the bank. The Reserve Bank of Australia (RBA) is widely expected to cut interest rates when the central bank meets again on Tuesday, 18 February.
"A looming interest rate cut in the Australian economy may subdue any potential upside," Massey noted.
"The shares have risen from $24.27 on February 7, 2024, to trade at $33.865 on February 6, 2025," he said. "Given a strong share price increase in the past year, profit-taking might be prudent."
Westpac's last price-sensitive news was released back on 4 November when the bank reported its half-year results.
Today, however, Westpac did announce new appointments to its board.
In today's news
In an announcement unlikely to have a material impact on Westpac shares today, the bank announced the appointment of Debra Hazelton and David Cohen as independent non-executive directors.
Their appointments remain subject to regulatory approval.
"We are pleased to welcome Debra and David to the board," Westpac chairman Steven Gregg said. "Their extensive experience across banking and financial services complements the skills of existing directors and will be invaluable as Westpac executes its strategy."
Gregg added:
Debra brings a wealth of experience in transformation, capital markets and people and culture from her senior executive and director roles in Australia and Japan and will join our board Remuneration Committee.
David's breadth of large-scale executive leadership roles and experience in banking transformation, risk and regulation and governance will also be highly valued and he will join our board Risk Committee.
