Although the Westpac Banking Corp (ASX: WBC) share price has been trading sideways in recent months, that hasn’t stopped it from smashing the market in 2021.
Since the start of the year, the banking giant’s shares are up 29%. This is more than triple the return of the S&P/ASX 200 Index (ASX: XJO).
Could the Westpac share price hit $30.00 by Christmas?
The good news for investors is that one leading broker still sees a lot of upside in the Westpac share price.
A recent note out of Goldman Sachs reveals that its analysts have retained their buy rating and $29.83 price target on the bank’s shares.
Based on the current Westpac share price of $25.35, this implies potential upside of almost 18% for investors before dividends.
And with Goldman forecasting a 128 cents per share fully franked dividend in FY 2022, the total potential return on offer stretches close to 23%.
All in all, the team at Goldman Sachs appears to believe there is a possibility the Westpac share price could be trading near $30.00 at Christmas.
What did the broker say?
There are a number of reasons that Goldman is positive on the Westpac share price. This includes its belief that the company’s bold cost reduction plans pose upside risk to earnings estimates in the coming years.
Goldman explained: “We maintain our Buy rating given: i) the balance of risk to our earnings remains skewed to the upside, with our FY24E cost forecast about 10% above management’s FY24E target of A$8 bn (on a like-for-like basis), which, if achieved, would drive our FY24E cash earnings up by c. 7%; ii) volume momentum appears to have been reinvigorated, now tracking at 7.5% 3-month annualised as at Jun-21 (vs 0.2% 6 months ago), and iii) the stock is trading more than one standard deviation cheap versus the sector on PPOP multiples (15% discount vs. 1.5% long-run average discount), and our revised TP offers 22% TSR.”
Should you invest $1,000 in Westpac right now?
Before you consider Westpac, you’ll want to hear this.
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- What these top brokers are saying about the Westpac (ASX:WBC) share price
- ASX 200 (ASX:XJO) midday update: Westpac’s $1.3bn earnings hit, Ansell sinks
- Westpac (ASX:WBC) share price edges lower following $1.3bn hit to earnings
- Why this top broker is bullish on the Westpac (ASX:WBC) share price
- How did ASX bank shares perform in the last quarter?
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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