Well, it's been a phenomenal week for Westpac Banking Corp (ASX: WBC) shares, perhaps one of the best we've seen in years. This time last week, Westpac stock closed at $33.66.
Today, at the time of writing anyway, those same Westpac shares are going for $36.90, a good 9.6% above where they were just seven days ago.
To put that in context, this gain is worth more than two years' worth of Westpac dividends at the current yield.
What's more, today has seen the Westpac share price hit a new 52-week high. The $36.92 high watermark that Westpac shares touched this afternoon is also the highest this ASX 200 bank stock has traded at in ten years.
At the current price, investors are now sitting on a healthy 13.9% gain year to date. That stretches to a rosy 26% over the past 12 months.
The catalyst for this week's impressive share price gains was Westpac's quarterly update, which we got a look at yesterday.
As we covered at the time, this report revealed Westpac's statutory net profit for the quarter ending 30 June came in at $1.9 billion. That was up a staggering 14% from the same quarter in 2024.
So we know how the market regarded Westpac's latest update. But today, let's see what an expert investor reckons.
Analysts at Macquarie have just released some commentary on Westpac shares, which makes for some interesting reading.
Unfortunately for shareholders, it's not good news.
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Expert rates Westpac shares as a sell
Macquarie has described Westpac's latest numbers as a result of "temporary tailwinds".
Here's some of what they said:
…we believe many of the factors that contributed to the [quarterly earnings] beat (i.e. lower liquids, stronger markets income, funding spreads, and the phasing of investment spend) are likely to moderate or reverse in 4Q25…
While 3Q25 trends appear sound, headwinds highlighted in the CBA results, as well as the diminishing benefits of the replicating portfolio, are expected to affect FY26, leaving us cautious on the outlook.
Macquarie's analysts also raised concerns over rising costs at Westpac. It was noted that the bank is "continuing to hire front-line bankers", and as a result, Macquarie is expecting costs to continue to rise next quarter and beyond.
Pulling all of this together, Macquarie maintained its underperform rating on Westpac shares, citing valuation concerns:
WBC remains expensive, trading at >18x FY26E P/E (3-19% premium to ANZ and NAB). With execution risks around the UNITE program, in addition to headwinds from rate cuts, we continue to see risk to WBC's earnings and multiple. Maintain Underperform.
Macquarie has a 12-month share price target of just $30 for Westpac shares. If realised, that would see investors lose around 18.7% from where the shares are today.
Let's see if Macquarie is on the money here.
