WBC price target $41, page-197

Forget coronavirus, the afternoon plunge yesterday was specific to bank result outlooks.

I posted earlier in this thread about the impact of WBCs ability to react to RBA rate cuts in the context of managing margins. While the RBA cut yesterday was considered a certainty, the bank stocks were holding up okay during morning trading, but started tanking once the announcements started coming out about passing on the full 25bpts ... why? Because the only way they can do that is by slashing Net Interest Margins. You wont see the impact in the half year results (as only 2 weeks impact) but it will be prevalent in the 2nd half. With margins dropping and lending volumes decreasing for WBC, ANZ and NAB, the reported NPATs are only going in one direction. My earlier post was dismissed by the resident self proclaimed "smartest investor" as not important but the market reaction in afternoon trading reaffirms the situation.

Another rate cut likely in the coming months and consumers have all of the pricing power at the moment. This is not shooting towards $41 anytime soon.