The Westpac Banking Corp (ASX: WBC) share price was on the rise on Monday.
The banking giant's rose 1% to $25.36 after announcing the sale of its Australian life insurance business to TAL.
This latest gain means the Westpac shares price is now up an impressive 29% in 2021.
Can the Westpac share price rise further?
The good news is that one leading broker still sees a lot of value in the Westpac share price.
According to a note out of Goldman Sachs this morning, the broker has retained its buy rating and $29.03 price target on the bank's shares.
Based on the current Westpac share price, this represents potential upside of 14.5% over the next 12 months before dividends.
And with Goldman forecasting a fully franked 4.9% dividend yield in FY 2022, this means there's an almost 20% total return on offer for investors.
What did Goldman say?
Goldman doesn't see the sale of its Australian life insurance business as material but rather an incremental positive.
It commented: "Given the size of the accounting loss, we estimate the net assets in the business amounted to c. A$1.9 bn, so the A$900 mn sale proceeds are a large discount to the net assets of the business. However, the sale is relatively immaterial, releases capital and continues WBC's strategy of focusing the operations back towards Australia and New Zealand Banking, which we see as a positive. Maintain Buy on WBC."
Why does the broker like Westpac?
Goldman Sachs is positive on Westpac due to its improving fundamentals and supportive valuation.
It notes that the balance of risk to its earnings remains skewed to the upside, with its FY 2024 cost forecast about 10% above management's target of $8 billion.
Goldman highlights that if management were to achieve these targets, this would drive its FY 2024 cash earnings estimates up by ~7%.
The broker also notes that the Westpac share price is trading at a significant discount to the sector compared to historic pre-provision operating profit (PPOP) multiples.
Overall, it believes this makes it a top option for investors at present.
