Despite being down almost 4% year-to-date, the Australia and New Zealand Banking Group (ASX: ANZ) share price could still be overvalued according to one leading broker.
According to a research note out of Morgan Stanley this week, its analysts have downgraded the banking giant from overweight to an equal-weight rating.
Furthermore, the broker has cut the price target on its shares down from $30.00 to $29.00.
The note reveals that Morgan Stanley has concerns over the bank's ability to recover revenue and believes that its loan loss versus normalised loss rates are far greater than the rest of the big four banks.
In light of this, the broker thinks that ANZ Bank has the highest risk profile of the four.
Should you sell your ANZ shares?
Whilst I wouldn't be a buyer of its shares right now, I also wouldn't be in a rush to sell if I were an existing shareholder.
I think ANZ's shares are about fair value at the current share price, making it well worth sticking around to collect its generous trailing fully franked 5.5% dividend.
But if you're not already a shareholder of ANZ or any of the other big four banks, I would suggest you take a closer look at Westpac Banking Corp (ASX: WBC).
I think Australia's oldest bank offers investors the best combination of value and yield in the banking sector right now.
