Despite a recent blip following its first quarter update, the Commonwealth Bank of Australia (ASX: CBA) share price has been a very strong performer in 2021.
Since the start of the year, the banking giant's shares have charged close to 19% higher to $99.36.
This is almost double the return of the S&P/ASX 200 Index (ASX: XJO) over the same period.
Where is the CBA share price heading in 2022?
While there are a number of brokers out there that are tipping the CBA share price to fall in 2022, one leading broker sees scope for it to push higher.
In fact, the team at Bell Potter believe there is potential for Australia's largest bank's shares to hit a new record high.
According to a recent note, its analysts have a buy rating and $111.00 price target on the company's shares. Based on the current CBA share price, this implies potential upside of 11.7% for investors over the next 12 months.
In addition, Bell Potter is tipping the bank to increase its fully franked full year dividend by 12.5% to $3.94 per share in FY 2022. This represents a yield of 4% at current levels, stretching the total return on offer to almost 16%.
What did the broker say?
While the broker acknowledges that the bank's first quarter update revealed that trading conditions are tough due to mortgage competition, it continues to see enough value in the CBA share price at the current level to maintain its positive view.
Bell Potter commented: "Given its lower quarterly performance, CBA's cash NPAT is reduced by 3% across the forecast horizon. This is mainly due to lower NII (-1%) and other income (-2%) but flat in total excluding the AHL divestment (above system growth that offset margin pressures and lower other income), slightly lower operating expenses (+1% based on lower remediation costs) and just a minor change in loan impairment expense in FY22 of -33% (i.e. a lower expense). The price target is however lowered by 6% to $111.00 (previously $118.00) after also considering added dividend and ROE risks. Based on a 12-month TSR of greater than 15%, CBA is still regarded as a Buy."
