Is it time to buy Westpac shares?

The Westpac share price has taken a hit this week. Are the bank's shares ripe for a rebound?

The Westpac Banking Corp (ASX: WBC) share price continues to sink following its half-year results blip.

The bank announced on Monday that its net profit after tax came in at $3.3 billion for the half.

That represents a decline of about 1% over the prior corresponding period.

And it appears the slight decline in profits didn't go down well with investors.

The Westpac share price has lost about 4.6% of its value since the start of the week, with the bank's shares now trading for around $31.90.

Westpac Chief Executive Officer Anthony Miller did not directly address the slight slump in profits in the bank's results announcement.

However, he did note that the bank's customers have endured significant cost-of-living challenges over the past few years and highlighted macroeconomic headwinds facing the economy.

Geopolitical uncertainty is a key risk that's as high as it has been for a very long time. Changes to global trade policies have impacted markets and funding for the bank. Despite the volatility, it's important that we look through the noise and avoid reacting to the headlines.

On a side note, key headlines that will capture investors' attention will hit newsstands later this month following the Reserve Bank of Australia's meeting on May 20.   

And with the Reserve Bank of Australia expected to continue its rate-cutting cycle this year, Westpac's earnings and profits will likely come under further pressure.

As such, analysts are tipping Westpac shares to continue to decline, placing an average price target of about $28 on the bank's shares.

That implies a downside of about 12% over the next year.

Analysts at Macquarie have gone a step further, trimming their price target on Westpac shares to $27.50.

A man looking at his laptop and thinking.

Image source: Getty Images

Should you buy Westpac shares?

Clearly, now is not the time to buy Westpac shares, at least according to numerous analysts following the bank.

Still, there is a lot to like about Westpac, and further sell-offs will only make the bank's share price more appealing to investors.

While the Westpac share price has shed about 4.6% of its value over the last couple of days, it's still gained over 17% over the past year.

Some investors may feel compelled to lock in those gains before the more negative analysts' predictions come to light.

For others, it could be worth keeping in mind that Australia's oldest bank's shares are still trading at well below previous highs.

Back in March 2015, Westpac shares were changing hands at around $38.89 each.

And with Westpac's dividend yield sitting at around 4.77% based on its current share price, the bank's shares could be worth a closer look.

Motley Fool contributor Steve Holland has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has positions in and has recommended Macquarie Group. The Motley Fool Australia has positions in and has recommended Macquarie Group. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

More on Bank Shares

Couple using their digital tablet together.
Bank Shares

Are CBA shares still worth buying near $150?

I look at whether the recent pullback has made this major bank more attractive today.

Read more »

Bank written on a brown building.
Bank Shares

Westpac vs NAB shares: Which big bank is the better buy?

I compare Westpac and NAB shares for value, yield and momentum – here’s which bank I’d buy now.

Read more »

A man in a suit smiles at the yellow piggy bank he holds in his hand.
Bank Shares

If I invest $10,000 in CBA shares today, what could they be worth in October 2027?

Find out what brokers expect next out of CBA shares.

Read more »

Piles of increasing coins on Australian $100 notes.
Bank Shares

By October 2027, $5,000 invested in this ASX bank stock could turn into…

Guess how much upside is expected out of this ASX stock!

Read more »

Happy young woman saving money in a piggy bank.
Bank Shares

If I invest $10,000 in ANZ shares, what passive income could I receive in FY27?

Are you invested into ANZ shares? Here's what you could earn.

Read more »

Four business people wearing formal business suits and ties walk abreast on a wide paved surface with their long shadows falling on the ground ahead of them.
Bank Shares

Are ASX 200 bank stocks a buy in October?

Find out what analysts are forecasting for bank shares over the next 12 months.

Read more »

A woman wearing a yellow shirt smiles as she checks her phone.
Bank Shares

Commonwealth Bank vs ANZ: Which is better for passive income?

Which ASX banking giant delivers better passive income: Commonwealth Bank or ANZ? Let’s stack up their dividends, franking and recent…

Read more »

Bank building with the word bank in gold.
Bank Shares

Here's the dividend forecast out to 2028 for Westpac shares

How much dividend income can investors bank on in the years ahead?

Read more »