Westpac Banking Corp (ASX: WBC) shares have been on a tear since plumbing to one-year closing lows of $29.15 on 9 April.
Shares in the S&P/ASX 200 Index (ASX: XJO) bank stock closed down 1.77% on Monday, trading for $38.29 apiece.
Despite that retrace, shares in the big four bank are up an impressive 31.26% since 9 April.
Shares got a particularly big boost on 14 August, closing the day up 6.3%, following the release of Westpac's third-quarter results.
Taking a step back, Westpac shares have also handily outperformed the benchmark index over the full year, up 24.85% compared to the 10.98% 12-month gains posted by the ASX 200.
And let's not forget Westpac's dividends.
Over the full year, the Aussie bank paid out $1.52 a share in fully franked dividends to eligible shareholders. At Monday's closing price, that sees the stock trading on a fully franked trailing dividend yield of 3.9%.
With this picture in mind, can the ASX 200 bank stock keep outperforming in FY 2026?
Westpac shares: Buy, hold, or sell?
Sequoia Wealth Management's Peter Day recently ran his slide rule over the big four bank (courtesy of The Bull).
"The bank reported an unaudited statutory net profit of $1.9 billion in the third quarter of fiscal year 2025, up 14% on the first half average," said Day, who has a sell recommendation on Westpac shares. "The result was about 12% to 14% of consensus estimates."
Highlighting Q3 results, Day said:
Revenue was up 4%. Net interest income increased 4%, mostly due to an increase in the net interest margin to 1.99%. Treasury and Markets contributed 14 basis points, up from 12 basis points.
Atop these strong growth metrics, the bank also reported customer deposit growth of $10 billion and gross loan growth of $16 billion for the third quarter. And the bank is investing in AI technology to combat fraud and help staff spot scams in real time.
Commenting on the quarterly results on the day they were released, Westpac CEO Anthony Miller said, "We grew strongly in business and institutional banking, while focusing on returns in consumer and improving customer experience."
Despite those strong results, Day foresees potential headwinds building for Westpac shares in the months ahead.
According to Day:
The result was well received by the market, but we would caution in fully extrapolating the revenue momentum into the fourth quarter. Investors may want to consider pocketing some gains.
