Morgan Stanley has lowered the price target for Australia’s Westpac Banking Corp (ASX:WBC) due to perceived ‘challenges’ in its turnaround strategy.

The brokerage has decreased the price target by 2.5% to A$20.10, while maintaining an ‘Equal-weight’ rating on the lender.

Morgan Stanley stated, ‘There are some signs of improvement in Westpac’s franchise performance, but competition and inflation have made the turnaround more challenging.’ The firm anticipates lagging revenue growth for Westpac compared to its major bank peers in the three years to FY25, and an even more uncertain outlook for cost growth.

It also downgraded the bank’s profit excluding notable items by 2% in FY24 and 3% in FY25E due to higher expenses.

Westpac’s stock is currently down 0.4% at A$21.065.

Out of 13 analysts, three rate the stock as ‘buy’, four ‘hold’, and six ‘sell’ or lower, with a median price target of A$20.80.

As of the last close, the stock was down 9.4% for the year.

Westpac Banking Corp (ASX:WBC) is one of Australia’s largest banks and provides a broad range of banking and financial services.