How much are Westpac shares worth in April?

We check what the bank's shares could fetch this month.

| More on:
A man sitting at his dining table looks at his laptop and ponders the CSL balance sheet and the value of CSL shares today

Image source: Getty Images

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

Key points

  • Westpac has a market cap of more than $84 billion
  • Some brokers are tipping the Westpac share price will fall
  • However, Citi has a price target of $27 on the bank

At today's Westpac Banking Corp (ASX: WBC) share price, the bank ranks as one of Australia's biggest companies. But how much are Westpac shares worth in April?

Westpac's current share price is $24.10, giving it a market capitalisation of $84.4 billion. To arrive at that number, the share price is multiplied by all of the Westpac shares that have been issued to investors.

But, what do investors think the underlying value of Westpac is?

Expert ratings on the Westpac share price

One of the latest brokers to issue an opinion on the big four ASX bank is Macquarie. It's 'neutral' on the bank, with a price target of $22.50. That implies a decline of more than 6% over the next year. The broker is concerned about challenges for the net interest margins (NIM) with strong competition across the industry.

Another of the more recent ratings was also not a bullish opinion. Morgan Stanley is 'equal-weight' on Westpac as well. Morgan Stanley has a share price target of $22.40, suggesting a possible decline of around 7%. The broker acknowledges that rising interest rates could be a positive for the NIM, but competition remains fierce and bad debts could increase.

However, Westpac is Citi's top major banking pick, with the broker preferring it to Commonwealth Bank of Australia (ASX: CBA), Australia and New Zealand Banking Group Ltd (ASX: ANZ), and National Australia Bank Ltd (ASX: NAB). Citi's price target on Westpac is $27, implying a possible rise of more than 12% for the Westpac share price.

What do we know of Westpac's recent operating performance?

The latest we've heard from the bank was its FY22 first quarter for the three months to 31 December 2021. It reported a statutory net profit after tax (NPAT) of $1.82 billion, which was up 80% on the quarterly average of the second half of FY21.

Cash earnings of $1.58 billion were up 74%. Excluding notable items, cash earnings rose 1%.

Lending was up $5 billion, or 0.7%, across institutional, mortgages, and New Zealand.

The NIM was 1.91%, down eight basis points, due to competition and higher liquid assets, according to the bank.

Expenses came to $2.7 billion, which was 26% lower. However, excluding notable items, expenses were down 7%.

Westpac booked an impairment charge of $118 million, mostly from increased provision 'overlays' reflecting continuing COVID-19-related uncertainty.

The bank did say that asset quality metrics "continue to improve".

At the end of the FY22 first quarter, Westpac said that it had a "strong" common equity tier 1 (CET1) capital ratio of 12.2%. With the release of the first quarter, the Westpac chief financial officer Michael Rowland said:

We have made a sound start to the year and we are seeing the cost benefits of our simplifications programs. The environment remains highly competitive and we continue to see pressure on margins.

Given this, we are bringing forward our simplification plans and changing our operating structure to improve efficiency and move more of our people closer to the customers they support.

Westpac share price valuation

Using Macquarie's estimates, the Westpac share price is valued at 15x FY22's estimated earnings and 14x FY23's estimated earnings.

Macquarie's guess for the FY22 grossed-up dividend yield is 7.25%.

Motley Fool contributor Tristan Harrison has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has recommended Macquarie Group Limited and Westpac Banking Corporation. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

More on Bank Shares

A young woman sits at her desk in deep contemplation with her hand to her chin while seriously considering information she is reading on her laptop.
Dividend Investing

Are CBA shares still a good buy today for passive income?

Looking to earn passive income from ASX dividend stocks? Here’s my take on CBA shares.

Read more »

Shocked office worker staring at computer screen with colleagues working in the background.
Bank Shares

The ASX bank share beating CBA in 2025

Many investors might not realise this smaller bank stock is leading the pack this year. 

Read more »

man thinking about whether to invest in bitcoin
Bank Shares

Here's what needs to happen for the CBA share price to try and reach $200

What could drive the CBA share price higher?

Read more »

A young woman sits at her desk in deep contemplation with her hand to her chin while seriously considering information she is reading on her laptop.
Bank Shares

Why now could be an opportune time to sell CBA shares

A leading expert offers his verdict on the outlook for CBA shares.

Read more »

A man holding a cup of coffee puts his thumb up and smiles while at laptop.
Bank Shares

The Westpac share price is a buy – UBS

The broker is optimistic on Westpac shares.

Read more »

Bank building with the word bank on it.
Bank Shares

The biggest buyers and sellers of ASX 200 bank stocks revealed

Macquarie breaks down who’s been buying and who’s been selling the ASX 200 bank stocks.

Read more »

A young woman sits with her hand to her chin staring off to the side thinking about her investments.
Resources Shares

Should I switch my ASX 200 banking stocks for ASX 200 miners before earnings season?

The ASX 200 Index is dominated by Australia's bank and materials/mining sectors, which together account for around half of the…

Read more »

A man sits in contemplation on his sofa looking at his phone as though he has just heard some serious or interesting news.
Bank Shares

Here's when Westpac says the RBA will now cut interest rates

The RBA surprised everyone by keeping rates on hold last week. So, when will the next cut happen?

Read more »