Westpac Banking Corporation’s shares experienced a dip following Morgan Stanley’s decision to lower its share price target for the Australian bank. The investment bank reduced its target by 1.5 per cent to $31.60, branding Westpac as its “least preferred” among the big four banks in Australia. Westpac is one of Australia’s largest banking and financial services institutions, providing a broad range of services to individuals, businesses, and institutions. The company operates through several brands and divisions to serve its diverse customer base.
Morgan Stanley’s analyst, Richard Wiles, highlighted concerns about Westpac’s strategy to reclaim its “natural market share” in mortgages and business banking, suggesting this ambition could incur significant upfront costs. Wiles pointed to potential earnings headwinds and execution risks looming in 2026 as factors contributing to their revised outlook.
The analyst believes current trading multiples reflect excessive optimism, failing to adequately account for the challenges Westpac faces. Morgan Stanley’s short-term share price target of $31.60 suggests a potential downside of more than 15 per cent for Westpac’s stock.
Investors and market participants will be closely watching Westpac’s performance in the coming months as the bank navigates these challenges and strives to execute its strategic objectives amid evolving market conditions.
