Westpac Banking Corp (ASX: WBC) shares are marching higher today.
Shares in the S&P/ASX 200 Index (ASX: XJO) bank stock closed yesterday trading for $42.04. In early afternoon trade on Tuesday, shares are changing hands for $42.30 apiece, up 0.5%.
For some context, the ASX 200 is down 0.2% at this same time.
Today's outperformance is par for the course for the big four bank over the past year. With today's intraday moves factored in, Westpac shares now up 35.2% in 12 months, racing ahead of the 8.4% one-year gains posted by the benchmark index.
And that's not including the two fully franked Westpac dividends, totalling $1.53 a share, the big bank paid out over the full year. Westpac trades on a fully franked trailing dividend yield of 3.6%.
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ASX 200 bank stock gets an earnings results boost
Westpac shares have gained 3.2% since market close on 12 February, while the ASX 200 has slumped 0.4% in this time.
That date is important, as the bank reported its first quarter earnings results on 13 February.
Highlights included net operating income of $5.81 billion, up 1% on the second half of 2025 average.
Westpac reported a 0.03% reduction in its net interest margin (NIM) for the three months to 1.94%. The bank said this reflected pressure from competition and the lower interest rate environment during the quarter.
On the bottom line, the ASX 200 bank stock achieved a 5% increase (compared to the second half of 2025 average) in unaudited statutory net profit to $1.9 billion.
"We are optimistic on the outlook for the economy and expect demand for both business and household credit to remain resilient," Westpac CEO Anthony Miller said on the day.
Which brings us back to our headline question…
Should you buy Westpac shares following the strong Q1 results?
Catapult Wealth's Dylan Evans recently ran his slide rule over the ASX 200 bank stock (courtesy of The Bull).
"The bank's first quarter update in fiscal year 2026 was positive, with profit growth of 6%, excluding notable items, tracking ahead of consensus," Evans said. "The bank's cost cutting program has the potential to boost earnings. "
As for the balance sheet, Evans added, "Upside potential is backed by one of the best balance sheets in the sector, and a strong retail banking franchise."
But amid valuation concerns, Evans isn't ready to pull the buy trigger yet, with a hold recommendation on Westpac shares.
He concluded:
Despite the positives, Westpac and the broader banking sector remain relatively expensive given modest growth expectations, so it's difficult to make a case for an overweight allocation.
Westpac trades on a price to earnings (P/E) ratio of around 20 times.
