If you're looking for exposure to the banking sector, then the Westpac Banking Corp (ASX: WBC) share price could be worth considering.
Although the shares of Australia's oldest bank are up 32% in 2021, one leading broker believes they can go higher.
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Who is bullish on the Westpac share price?
The team at Goldman Sachs still see a lot of value in the Westpac share price.
According to a recent note, the broker has a buy rating and $29.83 price target on the bank's shares.
Based on the latest Westpac share price of $26.02, this implies potential upside of 14.5% over the next 12 months.
In addition to this, Goldman Sachs is forecasting fully franked dividends per share of 116 cents in FY 2021, 128 cents in FY 2022, and 141 cents in FY 2023. This represents attractive yields of 4.5%, 4.9%, and 5.4%, respectively, over the three financial years.
What did the broker say?
Goldman is positive on the bank due to its belief that the risk is to the upside for earnings in the near term. This is due largely to management's bold cost cutting plans.
The broker explained: "We maintain our Buy rating given: i) the balance of risk to our earnings remains skewed to the upside, with our FY24E cost forecast about 10% above management's FY24E target of A$8 bn (on a like-for-like basis), which, if achieved, would drive our FY24E cash earnings up by c. 7%; ii) volume momentum appears to have been reinvigorated, now tracking at 7.5% 3-month annualised as at Jun-21 (vs 0.2% 6 months ago), and iii) the stock is trading more than one standard deviation cheap versus the sector on PPOP multiples (15% discount vs. 1.5% long-run average discount), and our revised TP offers 22% TSR [at the time]."
So while the Westpac share price has smashed the market this year, Goldman doesn't believe it is too late to invest.
