Westpac Banking Corporation (AU:WBC) is one of the four prominent banking institutions in Australia and also happens to be the oldest bank and company in the country. It offers a range of banking solutions, including personal, private, business, and corporate banking services. The bank’s shares have struggled over the last year, with a negative return of almost 7%.
Ahead of its upcoming earnings report, analysts are bullish on the stock and have rated it as a Moderate Buy.
Upcoming Results: The Expectations
Westpac will publish its first-half result for 2023 on Monday, May 8. According to TipRanks, the forecasted EPS for the second quarter of 2023 is AU$1.08 per share. In the last year’s corresponding period, the EPS was AU$0.85 per share. Overall, analysts expect the strong numbers to continue riding on margins boosted by higher lending rates. They also believe the bank could face some pressure in the second half of 2023 after margins have peaked.
Investment banking firm Goldman Sachs is highly bullish on the bank’s results. The broker is expecting the bank to post a more than 20% jump in its cash earnings to AU$3.781 billion as compared to H1 2022. This figure is slightly below the consensus estimate of $3,788 billion.
The forecasted dividends for the full fiscal year 2023 are around AU$1.44 per share, including an interim dividend of AU$0.72 per share. This reflects 18% growth from the interim dividend of AU$0.61 per share in FY 2022.
Along with the positive outlook, analysts are also maintaining a cautious stance for the second half of 2023 and 2024 due to the likelihood of peak margins, increased loan losses, and higher costs.
What is the Forecast for Westpac Shares?
WBC stock has a Moderate Buy rating on TipRanks, based on five Buy and three Hold, and two Sell recommendations.
At an average price target of AU$25.01, analysts predict an upside of 17% on the share price.
Is National Bank a Good Stock to Buy?
This week, another banking giant from Australia, National Australia Bank Limited (AU:NAB) also announced its 2023 interim results. NAB was the first of the big four banks in Australia to report its recent earnings, and analysts expect all of them to post strong results.
NAB posted a 17% jump in its cash earnings of AU$4.07 billion, driven by higher interest rates. The bank’s net interest margin, the primary measure of its profitability, was up by 14 basis points to 1.77% in comparison to the same period in the previous year. In addition, the bank has recognized the increasing number of customers experiencing financial distress.
Moreover, the return on equity metric, which indicates a company’s efficiency in utilizing shareholder funds to generate returns, increased by 220 basis points to 13.3%.
According to TipRanks’ consensus rating, NAB stock has a Hold rating based on a total of 10 recommendations. The average price forecast of AU$28.61 represents a growth of 7.2% in the share price.
Overall, analysts are optimistic about the results of the Australian banks during this earnings season. With NAB already posting record first-half earnings, analysts are equally hopeful about Westpac.
Considering the current decline in Westpac share prices, an investment in the stock could lead to higher returns.