Westpac Banking Corp (ASX: WBC) shares have had a tough time over the last 12 months.
During this time, the banking giant's shares have lost 6.5% of their value, as you can see on the chart below.
In light of this weakness, some investors may be tempted to pick up Westpac shares before it releases its results next week. But should they wait?
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Should you buy Westpac shares ahead of its results?
Buying shares before they release their results is a risky move. A strong result could see a share rocket higher, but a weak result could see the opposite happen.
In light of this, it may make sense to buy a share in two stages. Half before the results and half after the release. This limits your downside if things go awry and also allows you to benefit from any gains if things go well.
But is Westpac a buy? Well, it is according to Goldman Sachs. It is expecting a strong result from Australia's oldest bank and is recommending investors snap up its shares.
Goldman recently reiterated its conviction buy rating and $25.86 price target on the bank's shares. Based on the current Westpac share price of $22.55, this implies potential upside of 15% for investors over the next 12 months.
And with the broker forecasting a $1.44 per share fully franked dividend in FY 2023, which represents a 6.5% yield, the total potential return on offer here is approximately 21%.
What is Goldman expecting from the half-year result?
If you are planning to buy Westpac shares, you will no doubt want to keep an eye on its results.
Goldman Sachs is expecting Westpac to report cash earnings (before one-offs) of $3,781 million, which is just a touch short of the consensus estimate of $3,788 million. It also represents a sizeable 22.2% increase on the prior corresponding period.
This is expected to be supported by a net interest margin of 2.03% and underpin a fully franked interim dividend of 72 cents per share. The latter will be an 18% increase from FY 2022's interim dividend of 61 cents per share.
