It has been a stunning year for the Westpac Banking Corp (ASX: WBC) share price.
Since the start of 2021, the banking giant's shares have risen almost 31%.
This is nearly triple the return of the S&P/ASX 200 Index (ASX: XJO) over the same period.
Is the Westpac share price run over?
The good news is that one leading broker believes the Westpac share price run is far from over.
According to a recent note out of Citi, its analysts have a buy rating and $30.00 price target on the bank's shares.
Based on the current Westpac share price of $25.62, this implies potential upside of 17% before dividends.
Citi is also forecasting a fully franked dividend of $1.30 per share in FY 2022. So, if we add this into the equation as well, the potential return increases to over 22%.
What did the broker say?
Citi came away from a meeting with Westpac's management team late last month feeling very positive about the bank's outlook.
While it acknowledges that Westpac is facing revenue headwinds, particularly in the Markets and Treasury businesses, it expects the bank's cost cutting plans to help offset this.
Earlier this year management announced an ambitious plan to cut its operating costs by almost 40% by 2024. This will see the bank's operating expenses fall from FY 2020's $12.7 billion to approximately $8 billion.
Citi expects this to underpin generous dividends in the coming years. The broker is forecasting a fully franked dividend of $1.16 per share in FY 2021 and, as mentioned above, $1.30 per share in FY 2022.
Based on the current Westpac share price, this will mean yields of 4.5% and 5.1%, respectively, over the next couple of financial years.
All in all, the broker believes this makes the Westpac share price good value at the current level.
