The Australia and New Zealand Banking GrpLtd (ASX: ANZ) share price has been a strong performer in 2021.
Since the start of the year, the banking giant's shares are up 20% to $27.62.
This is close to double the return of the S&P/ASX 200 Index (ASX: XJO) over the same period.
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Can the ANZ share price keep climbing?
The good news is that one leading broker believes there is still a lot more upside for the ANZ share price over the next 12 months.
According to a recent note out of Morgans, its analysts have an add rating and $34.50 price target on the company's shares.
Based on the current ANZ share price, this means potential upside of 25% over the next 12 months before dividends.
And if you include the $1.65 per share fully franked dividend the broker is forecasting in FY 2022, this potential return stretches to almost 31%.
Why is Morgans bullish?
The note reveals that Morgans is bullish on the ANZ share price due to its attractive valuation and the bank's cost reduction plans.
Combined with a big improvement in the quality of its loan book, the broker believes this makes ANZ the best option among the major banks right now.
It commented: "We believe ANZ is the most compelling of the major banks on a valuation basis. We expect ANZ to continue to focus on absolute cost reduction over the medium term. ANZ has de-risked its loan book over recent years – particularly its institutional loan book – such that the quality of its loan book has improved. While ANZ's Australian home loan book has been growing below system over recent months, we expect a disciplined margin performance from ANZ."
All in all, the ANZ share price may be smashing the market this year, but Morgans doesn't believe it is too late to invest.
