Image source: Getty Images The Westpac Banking Corp (ASX: WBC) share price is trading lower with the market on Friday. In late morning trade, the banking giant’s shares are down 1.5% to $21.39. Is the Westpac share price in the buy zone? While Australia’s oldest bank isn’t getting a lot of love from investors at the moment, one leading broker believes now could be the time to pounce. According to a recent note out of Goldman Sachs, its analysts have put a conviction buy rating and $26.55 price target on the bank’s shares. Based on the current Westpac share price, this implies potential upside of 24% for investors over the next 12 months. This stretches to approximately 30% if you include the 5.7% fully franked dividend yield the broker is expecting in FY 2022. Why is Westpac a buy? Goldman believes that the Westpac share price offers the best risk/reward for investors at present. Particularly given its strong exposure to rising interest rates and its cost reduction plans. The broker commented: We continue to see WBC as our preferred exposure to the A&NZ Financials reflecting: i) its strong leverage to rising rates, ii) while we think its A$8 bn FY24 cost target will now be unachievable, we still forecast a 7% reduction in underlying expenses, iii) its recent market update highlighted that the business is still investing effectively in its franchise, and iv) our 12-mo TP implies a 23% [now ~30%] TSR, and we note the stock is trading at a 20% discount to peers, versus the historic average discount of 2%. All in all, this could make Westpac one to consider if you’re looking for exposure to the banking sector as interest rates rise.
