In morning trade the Commonwealth Bank of Australia (ASX: CBA) share price has edged higher by 1% to $76.76.
But according to one leading broker, it could be on its way back up to the $80 mark.
What is the broker saying?
A research note out of Morgans this morning reveals that its analysts have upgraded Australia's largest bank from a hold to an add rating with an $80 price target.
According to the note, the broker believes that the decision to sell its life insurance business is a positive for shareholders and will provide it with a reasonable lift on its return on equity and its CET1 capital ratio.
Based on the current share price this implies potential upside in the region of 4.2% over the next 12 months.
This increases to a total potential return of 9.8% when you include the trailing fully franked 5.6% dividend that its shares provide.
Should you snap up shares?
While I think that Westpac Banking Corp (ASX: WBC) shares provide investors with better value and a more generous yield, I do think that Commonwealth Bank is reasonable value now for a buy and hold investment.
It may not be the bargain buy it was a couple of weeks ago, but I feel it still offers investors a solid total potential return over the next 12 months that would make it a good addition today.
This could make it a good option for investors with little exposure to the banks already.
