This broker calls ANZ (ASX:ANZ) shares as the preferred bank pick

The Australia and New Zealand Banking Grp Ltd (ASX: ANZ) share price has emerged as Credit Suisse's preferred bank pick

| More on:

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

The big four ASX banks have been the driving force behind the S&P/ASX 200 Index (ASX: XJO) resurgence to near pre-COVID highs.

Credit Suisse released a series of share price upgrades for big four ASX bank shares on Thursday, with Australia and New Zealand Banking Grp Ltd (ASX: ANZ) emerging as its preferred pick in the banking and financials sector. 

Big four ASX bank upgrades 

Commonwealth Bank of Australia (ASX: CBA)

The CBA share price target was increased from $74.80 to $82.00 with a neutral rating. Despite the increase in price target, the CBA share price closed at $86.33 on Thursday, or a 5% downside to Credit Suisse's new price target. 

National Australia Bank Ltd (ASX: NAB

Credit Suisse raised its NAB share price target to $26.00 or a 9% upside to its previous close. The broker takes a positive view on NAB with an outperform rating. 

Westpac Banking Corp (ASX: WBC

The Westpac share price target was also upgraded to $22.50 or a 7% upside to its previous close with an outperform rating. 

ANZ

The ANZ share price has been the best performing bank amongst its peers in FY21, surging 32% in the last six months. Despite the surge, the ANZ share price is still 7% short of where it started 2020. 

Credit Suisse raised its ANZ share price target from $26.20 to $28.00 with an outperform rating. This points to an upside of 14% to ANZ's closing price on Thursday of $24.60. 

Overall, the broker anticipates a significant dividend recovery in F21 for all banks with potential capital management as soon as FY22. 

Economic recovery taking shape

A number of domestic economic developments have pointed to the recovery establishing reasonable momentum, supported by the recent lifting of lockdown restrictions in Victoria.

In the RBA's December board meeting, it noted that expectations for GDP growth in the September and December quarters had been upgraded over the preceding month, and employment had also recovered faster than anticipated. 

A rebound in household consumption was also seen as well, following a record contraction in the June quarter. 

More bank-specific data has also pointed to a significant improvement in loan deferrals and signs of life in housing credit growth.  

Motley Fool contributor Lina Lim 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.

More on Bank Shares

An ASX investor in a business shirt and tie looks at his computer screen and scratches his head with one hand wondering if he should buy ASX shares yet
Bank Shares

After the recent RBA rate cut, why is Macquarie underweight ASX bank shares?

Macquarie is not banking on strong returns from this sector.

Read more »

Business people discussing project on digital tablet.
Bank Shares

CBA vs Macquarie shares: Which one is best?

Ord Minnett has given its verdict on these giants.

Read more »

A woman wearing yellow smiles and drinks coffee while on laptop.
Bank Shares

How the CBA share price smashed the benchmark to close May at all-time highs

I hope you didn’t sell your CBA shares in April!

Read more »

A man casually dressed looks to the side in a pensive, thoughtful manner with one hand under his chin, holding a mobile phone in his hand while thinking about something.
Bank Shares

$10,000 invested in NAB shares 5 years ago is now worth…

NAB shares have delivered some benchmark smashing returns over the past five years.

Read more »

A man casually dressed looks to the side in a pensive, thoughtful manner with one hand under his chin, holding a mobile phone in his hand while thinking about something.
Bank Shares

Will CBA shares continue to outperform BHP shares over the next 5 years?

Which of these two giants will perform best? Let's find out.

Read more »

Bank building with the word bank in gold.
Bank Shares

What price targets does Macquarie have on the big 4 banks?

Here's what the broker has to say about the big 4 bank share prices.

Read more »

A man holds his hand under his chin as he concentrates on his laptop screen and reads about the ANZ share price
Bank Shares

Should I buy ANZ shares today?

With a 5.7% dividend yield, are ANZ shares a good buy right now?

Read more »

A woman sits at her computer with her hand to her mouth and a contemplative smile on her face as she reads about the performance of Allkem shares on her computer
Bank Shares

Can Bank of Queensland shares keep outperforming the other ASX 200 bank stocks into 2026?

A leading expert offers his verdict on what’s ahead for Bank of Queensland shares.

Read more »