Why this broker sees 11% upside in the Telstra (ASX:TLS) share price

The Telstra Corporation Ltd (ASX: TLS) share price certainly has been on form this year.

The telco giant's shares have risen an impressive 31% year to date to $3.95.

Where next for the Telstra share price?

The good news is that one leading broker is tipping the Telstra share price to keep rising.

According to a note out of Goldman Sachs, its analysts have retained their buy rating and lifted their price target on the telco giant's shares to $4.40.

Based on the current Telstra share price, this implies potential upside of 11% over the next 12 months before dividends.

And if you throw in the 16 cents per share fully franked dividend Goldman expects in FY 2022, the potential return increases to over 15%.

What did the broker say?

Goldman Sachs remains positive on the Telstra share price due to its belief that its key mobile business and cost reductions will underpin solid growth in the coming years.

The broker expects this to lead to earnings per share of 15 cents in FY 2022, 18 cents in FY 2023, and then 20 cents in FY 2024. The latter is expected to allow the company to lift its dividend for the first time in over a decade.

Goldman is forecasting dividends of 16 cents per share through to FY 2023 before an increase to 18 cents per share in FY 2024. Based on the current Telstra share price, this will mean yields of 4% and then 4.6%.

Anything else?

The broker also highlights that Telstra will be holding its Strategy for the Future Investor Day event this week. This strategy is expected to provide investors with an idea of its plans beyond its highly successful T22 strategy.

It commented: "Ahead of the much anticipated 'Strategy for the Future' investor day on Sept 16, we outline our expectations. Strategically we expect a continuation of the current strategy (simplicity and customer focus, network leadership and improved efficiency) but with a tilt towards growth (such as Energy, Health, FWA, Enterprise 5G)."

Goldman also expects updates on earnings targets, dividend plans, InfraCo, and CEO succession planning. The broker notes that "CEO Andrew Penn in his 7th year as CEO of Telstra, we believe commentary around the company's leadership post T22 could be provided."

A good update this week could potentially be a catalyst for driving its shares higher. So investors may want to watch that event closely.