Recent broker call fnarena.24th sept. WBC - WESTPAC BANKING CORPORATION: UBS rates WBC as Buy (1) -Westpac Banking Corp reached an agreement to settle the civil proceedings against it with the Australian Transaction Reports and Analysis Centre (AUSTRAC). This includes a penalty of -$1.3bn and brings to an end a disappointing chapter for the bank, observes UBS.On the bright side, the settlement is lower than the broker feared (-$1.5bn). With $900m already provided for in the first-half result, UBS notes Westpac will be providing for a further $404m in the second half.UBS believes Westpac's balance Sheet is well provisioned but it is the capital position which remains an overhang. Moreover, the bank needs substantial investment in technology and integration to achieve the necessary efficiency gains to help offset its weak revenue outlook, suggests the broker.Buy and $20.50 target retained.Target price is $20.50 Current Price is $16.37 Difference: $4.13 If WBC meets the UBS target it will return approximately 25% (excluding dividends, fees and charges). Current consensus price target is $20.03, suggesting upside of 22.3%(ex-dividends)The company's fiscal year ends in September.Forecast for FY20:UBS forecasts a full year FY20 EPS of 92.00 cents .At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 17.79. How do these forecasts compare to market consensus projections?Current consensus EPS estimate is 101.0, implying annual growth of -56.3%.Current consensus DPS estimate is 34.0, implying a prospective dividend yield of 2.1%.Current consensus EPS estimate suggests the PER is 16.2.Forecast for FY21:UBS forecasts a full year FY21 EPS of 139.00 cents .At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 11.78. How do these forecasts compare to market consensus projections?Current consensus EPS estimate is 157.5, implying annual growth of 55.9%.Current consensus DPS estimate is 83.5, implying a prospective dividend yield of 5.1%.Current consensus EPS estimate suggests the PER is 10.4.
WBC Price at posting:
$17.58 Sentiment: Buy Disclosure: Held
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