The Westpac Banking Corp (ASX: WBC) share price has been a positive performer on Friday.
In afternoon trade, the banking giant’s shares are up 1% to a 52-week high of $26.80.
This means the Westpac share price is now up an impressive 36% since the start of the year.
Why is the Westpac share price pushing higher today?
The catalyst for the rise in the Westpac share price today appears to have been a bullish broker note out of Morgan Stanley.
According to the note, the broker has retained its overweight rating and $29.20 price target on the bank’s shares.
Based on the latest Westpac share price, this implies potential upside of 9% over the next 12 months excluding dividends.
And with Morgan Stanley forecasting dividends of $1.18 per share in FY 2021 and $1.25 per share in FY 2022, the potential total return stretches to approximately 13.5%.
What did Morgan Stanley say?
The note reveals that Morgan Stanley is expecting the big four banks to return significant capital to shareholders via off-market buybacks. It sees this as a way to distribute extra franking credits.
And while it suspects that the banks will remain conservative in the near term until all ongoing pandemic risks are accounted for, once the crisis passes it believes Westpac has the strongest case for a buyback.
It is expecting a $3.5 billion buyback to be announced with Westpac’s half year results in FY 2022.
Is anyone else bullish on Westpac?
Morgan Stanley isn’t the only broker that sees value in the Westpac share price.
A note out of Citi at the start of the week reveals that its analysts have a buy rating and $29.50 price target on its shares. It sees opportunities for return on equity improvements via its cost reduction plans.
Citi’s price target and its dividend forecasts imply a total potential return of ~14.5% over the next 12 months.