-- Westpac Banking (ASX:WBC, NZE:WBC) is faring well with solid fundamentals, but its recent annual earnings guidance cut calls for a cautionary glance on weaker net interest margin, Jefferies said in a note on Tuesday.
The bank revised its fiscal 2026 earnings per share down by 3%, dragged down by lower first-half net interest margin due to reduced markets and treasury contribution, one-off costs from the sale of its RAMS mortgage portfolio, and higher loan impairment charges.
The investment firm said that provisions increased despite improving asset quality, pointing to a more defensive macroeconomic stance.
Analysts at Jefferies also expect Westpac's New Zealand segment to be negatively affected by currency weakness in the first half, creating a modest headwind to earnings.
Jefferies reaffirmed a hold rating on Westpac Banking and lifted the price target to AU$34.92 from AU$34.88.