** Jefferies hikes PT on Westpac WBC.AX to A$28.05 from A$27.74, citing short-term relief from aggressive repricing strategies

** However, Jefferies maintains "hold" rating, believing the bank might face largest earnings headwind from lower rates among its peers

** Brokerage downgrades FY26 and FY27 EPS estimates by 1.2% and 2.9%, respectively, reflecting heightened exposure to lower rates

** Brokerage sees interest rate environment to be the main factor affecting sector's net interest margin over the next three years, given a more benign competitive backdrop reflecting pressures on dividend sustainability

** Australian cash rates were cut by 0.25% in both February and May while markets are pricing another 0.75% cut in cash rate over the next 12 months - Jefferies

** YTD, WBC up 2.4%, underperforming benchmark ASX200 .AXJO index's gains of 4.7%

(Reporting by Kumar Tanishk in Bengaluru)

((Tanishk.Kumar@thomsonreuters.com; X: @thatstanishk;))