The Westpac Banking Corp (ASX: WBC) share price was a very positive performer on Monday.
The banking giant's shares finished the day 5% higher at $26.23.
This means the Westpac share price is now up an impressive 33.5% since the turn of the year.
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Why did the Westpac share price race higher?
Investors were scrambling to buy the company's shares following the release of a strong half year result.
For the six months ended 31 March, Westpac reported first half cash earnings of $3,537 million. This was a 256% increase over the prior corresponding period and a 119% lift over the second half of FY 2020.
This strong form allowed the Westpac board to declare a fully franked interim dividend of 58 cents per share. If you annualise this, it works out to be an attractive fully franked 4.4% dividend yield.
Another very big positive from the update was the announcement of a major cost cutting plan.
Westpac is targeting an $8 billion cost base by FY 2024 in order to materially improve its efficiency. This will be a 21.5% reduction on FY 2020's cost base of ~$10.2 billion.
Is it too late to invest?
According to a note out of Goldman Sachs, its analysts still see a lot of value in the Westpac share price.
This morning the broker retained its buy rating and lifted its price target to $29.03. This represents potential upside of 10.5% over the next 12 month excluding dividends.
Goldman commented: "We maintain our Buy rating on the stock on improving fundamentals and supportive valuations. To this end, we note that 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 during the half, while containing NIM pressures; iii) the stock is trading more than one standard deviation cheap versus the sector on PPOP multiples (10% discount vs. 1% long-run average discount); and iv) our revised TP offers c. 15% TSR."
What about other brokers?
A number of other brokers have responded to Westpac's update.
One of those is Credit Suisse. This is morning it retained its outperform rating and lifted its price target to $28.00.
Elsewhere, Morgans has held firm with its add rating and increased its price target to $29.50 and Morgan Stanley has retained its overweight rating and lifted its price target to $29.20.
All these price targets indicate that the Westpac share price can still climb higher from where it currently trades.
