The Suncorp Group Ltd (ASX: SUN) share price has been a strong performer in 2021.
Since the start of the year, the banking and insurance giant's shares have risen 27%.
This is more than double the gain of the S&P/ASX 200 Index (ASX: XJO) over the same period.
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Can the Suncorp share price keep rising?
The good news is that the team at Goldman Sachs believe the Suncorp share price can rise further from here.
According to a recent note, the broker has a buy rating and $13.74 price target on the company's shares.
Based on the current Suncorp share price of $12.52, this implies potential upside of 10% over the next 12 months before dividends.
In addition to this, the broker is expecting generous dividends from Suncorp in the coming years. It has pencilled in fully franked dividends per share of 61 cents in FY 2022, 73 cents in FY 2023, and 76 cents in FY 2024.
As a result, this means the total potential return on offer is approximately 15% including its FY 2022 dividends.
What did Goldman say?
While Goldman acknowledges that the Suncorp share price is not cheap, it still sees enough value to maintain its buy rating. Particularly given its positive momentum and its belief that the risks are to the upside for its earnings.
Goldman said: "While it is now harder to argue that SUN is cheap, we have nonetheless maintained our Buy rating, where we see good momentum in the business, plus near-term earnings risks as skewed positively noting: 1) provided pressure does not mount on the industry to return recent motor frequency benefits, SUN will almost certainly record gains in 1H22 (potential for c.5% upside in EPS), 2) SUN's recent reserve development remains well above its normalised 1.5% release assumption and noted relative comfort in the outlook, 3) scope for further banking collective provision release, and 4) into FY23 if we were to calibrate to the mid-point of SUN's insurance margin targets alongside the bank cost/income ratio target we would see c.10% upside."
