Morgan Stanley expects Westpac’s first half result will elicit a positive response, with the bank delivering a 4% pre-provision profit beat to the broker’s expectations, up 6% half-on-half, driven by cost improvements and margin stabilisation.
The bank downgraded its second half expense guidance to $5.03-5.14bn, although Morgan Stanley continues to forecast expenses of $5.13bn.
The rating is upgraded to Overweight from Equal-Weight and the target price increases to $25.70 from $22.50. Industry view: Attractive.
Target price is $25.70.Current Price is $24.46. Difference: $1.24 – (brackets indicate current price is over target). If WBC meets the Morgan Stanley target it will return approximately 5% (excluding dividends, fees and charges – negative figures indicate an expected loss).