Westpac Banking Corp (ASX: WBC) shares seem to have been stuck in the doldrums for a while now. The Westpac share price is up over the past 12 months, but just by 0.62%. And since the start of 2023, this ASX 200 bank share has lost a rather nasty 11% or so of its value.
Zooming out, the picture only gets bleaker for investors. Over the past five years, Westpac shares have lost more than 27.7%, as you can see below:
As an ASX 200 big four bank share, Westpac is obviously a popular investment on the ASX for many investors, especially those chasing dividend income. Right now, Westpac shares are living up to their banking reputation as generous dividend payers, with the company now sporting a trailing (and fully franked) dividend yield of more than 6.6% at the time of writing.
So with the Westpac share price nursing such heavy losses in recent years, some investors might be wondering if there is some value in buying this ASX bank right now.
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Are Westpac shares a banking buy today?
Well, one ASX broker reckons there is some value in the Westpac share price at its current level. As we covered last week, ASX broker Morgans has named Westpac as a bank to buy. It gave Westpac shares a 12-month share price target of $24.22, as well as an add rating. If realised, that would result in a gain of 19.8% from the current Westpac share price of $20.22 (at the time of writing).
Here's how the broker justified this bullish rating on Westpac shares:
We view WBC as having the greatest potential for return on equity [ROE] improvement amongst the major banks if its business transformation initiatives prove successful.
The sources of this improvement include improved loan origination and processing capability, cost reductions (including from divestments and cost-out), rapid leverage to higher rates environment, and reduced regulatory credit risk intensity of non-home loan book. Yield including franking is attractive for income-oriented investors, while the ROE improvement should deliver share price growth.
So no doubt those views will be comforting for Westpac investors right now.
It's worth mentioning that another important ASX investor also seems to think there is a lot of value in the bank today. That would be Westpac's own non-executive director Nora Scheinkestel. Scheinkestel is a Westpac insider and board member who chairs the company's board remuneration committee.
According to an ASX notice put out last month, Scheinkestel bought an additional 2,330 shares of Westpac on 22 May. She paid just under $50,000 for this parcel of shares, bringing her total holding in the bank to 14,471 shares (held both directly and indirectly).
As such, it's clear that more than one expert investor is seeing value in the Westpac share price today.
