Westpac Banking Corp (ASX: WBC) shares are edging higher today.
Shares in the S&P/ASX 200 Index (ASX: XJO) bank stock closed yesterday trading for $35.48. In early morning trade on Wednesday, shares are changing hands for $35.51 apiece, up 0.1%.
For some context, the ASX 200 is up 0.2% at this same time.
Westpac stock, and its investors, had been enjoying a multi-year uptrend, right up until notching a new all-time closing high of $42.77 a share on 10 April.
Since that high-water mark, shares in the ASX 200 bank stock have slumped 17%, materially underperforming the 1.9% losses posted by the benchmark index over this same period.
Longer term, Westpac shares remain up 2.8% over the past 12 months. Atop those capital gains, Westpac also trades on a fully-franked 4.3% trailing dividend yield.
But casting his eye to the future, Bell Potter Securities' Christopher Watt believes the big four bank could face some difficult times (courtesy of The Bull).
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Should I sell Westpac shares today?
"The business is improving on the metrics that matter, but the operating backdrop is weakening," Watt said.
And Watt expects that the new Federal Budget won't be doing Westpac many favours. He noted:
Mortgage applications since the Federal Budget in May are below the prior two quarters, pointing to a slowdown in housing credit growth into next year. Proposed tax changes to capital gains tax and negative gearing have soured sentiment, and there's no fresh financial guidance to lean on.
Summarising his sell recommendation on Westpac shares, Watt concluded, "With Westpac's stock trading near the top of its range amid a possible earnings downgrade, I see more downside than upside from here."
What's the latest from the ASX 200 bank stock?
Westpac released its first-half (H1 FY 2026) results on 5 May.
For the six months to 31 March, Westpac reported $11.3 billion in revenue, down 2% from H2 FY 2025.
And on the bottom line, Westpac's half-year statutory net profit of $3.4 billion was up 3% year on year, but down 5% from the previous half.
"This half, we've delivered solid operating momentum while investing for the future," Westpac CEO Anthony Miller said. "Our strong balance sheet and disciplined focus will allow us to support customers through global uncertainty."
Miller noted that H1 growth across the bank's lending and deposits had been "solid".
Westpac shares closed down 2.2% on the day of the results release.
