If you’re looking to invest in the banking sector, then the Westpac Banking Corp (ASX: WBC) share price could be worth considering.
This is because one leading broker is tipping the shares of Australia’s oldest bank to shoot higher.
Is the Westpac share price a buy?
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 $25.17, this implies potential upside of 19% over the next 12 months.
And that’s before dividends. Citi is forecasting a $1.30 per share fully franked dividend in FY 2022. Adding this into the equation, the potential total return stretches to just over 24%.
That’s a very attractive return. Especially when you consider that the Westpac share price is already up 28% since the start of the year.
Why does Citi like Westpac?
Citi is positive on the Westpac share price due to the bank’s bold cost cutting plans.
The company currently has a cost base of approximately $12.7 billion, but is aiming to reduce this down to $8 billion in the coming years.
Citi expects the bank’s cost cutting to help offset a number of revenue headwinds it is facing. This is particularly the case in its Markets and Treasury segments, which remain under pressure.
Does anyone else like Westpac?
Citi isn’t the only broker that likes Westpac. The team at Morgans are also positive on the bank and have an add rating and $29.50 price target on its shares.
This is due partly to its valuation, balance sheet strength, and the prospect of significant share buybacks.
In the respect to the latter, Morgans is forecasting $8 billion of off-market share buybacks over FY 2022 and FY 2023. It expects the commencement of these buybacks to be announced alongside its result release in November.
The post Top broker sees 19% upside for the Westpac (ASX:WBC) share price appeared first on The Motley Fool Australia.
Should you invest $1,000 in Westpac right now?
Before you consider Westpac, you’ll want to hear this.
Motley Fool Investing expert Scott Phillips just revealed what he believes are the 5 best stocks for investors to buy right now… and Westpac wasn’t one of them.
The online investing service he’s run for nearly a decade, Motley Fool Share Advisor, has provided thousands of paying members with stock picks that have doubled, tripled or even more.* And right now, Scott thinks there are 5 stocks that are better buys.
*Returns as of August 16th 2021
More reading
- Why this top broker thinks the ANZ (ASX:ANZ) share price is overcooked
- Westpac (ASX:WBC) and this ASX dividend share could be buys in October
- Confirmed: APRA is planning action on home loans, ASX 200 banks drop
- Why these experts say the Westpac (ASX:WBC) share price could be on the way up
- Why these experts think the NAB (ASX:NAB) share price is on the way up
Motley Fool contributor James Mickleboro owns shares of Westpac Banking Corporation. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.
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