What does the future look like for the ANZ (ASX:ANZ) share price?

The bank is currently having a good time.

| More on:
Woman standing with one leg on top a mountain looking over a lake

Image source: Getty Images

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 Australia and New Zealand Banking Group Ltd (ASX: ANZ) share price has had a great year thus far.

Shares in the banking giant have soared more than 21% since the start of the year.

By comparison, the S&P/ASX 200 Index (ASX: XJO) has only managed to claw 12.5% higher in 2021.

It's not very common to see the share price of a big bank like ANZ outperforming the broader index.

So, what is the outlook for the ANZ share price?

Can the ANZ share price keep rising?

According to a leading broker, investors can expect more upside for shares in ANZ.

A recent note published by Morgan's painted a bullish outlook, with analysts having an add rating and $34.50 price target on the bank's shares.

Analysts cited ANZ's attractive valuation and cost reduction plans for the positive outlook.

Given its strong capital position, analysts also forecast ANZ to pay out a full franked dividend of $1.65 per share in FY22.

In addition, the broker spruiked ANZ as potentially being the best option among major Aussie banks right now.

On the contrary, some experts have flagged a more bearish outlook for the ANZ share price.

According to the commentary, moderation in volume and housing growth could slow near-term growth prospects for the big banks.

Snapshot of the ANZ share price

There are several catalysts that appear to have helped propel the ANZ share price higher this year.

In May, ANZ reported a strong first-half report for FY21.

The report highlighted a 45% increase in statutory profit after tax of $2.94 billion.

Continuing operations cash profit also increased 28% for the first half to $2.99 billion.

ANZ has also highlighted improved credit conditions which resulted in the release of almost $500 million during the half.

In its recent business update for the third quarter, the banking giant noted that its CET1 ratio came in at 12.2%, a slight reduction from the 12.4% recorded in the previous period. 

With its strong capital position and cost reductions, ANZ announced its intention to buy back up to $1.5 billion of shares on market as part of its capital management plan.

The bank's buyback is also expected to reduce ANZ's CET1 ratio by a further 35 basis points.

The ANZ share price closed yesterday's trading session slightly lower at $27.61.

Motley Fool contributor Nikhil Gangaram has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. 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

A man sits in deep thought with a pen held to his lips as he ponders his computer screen with a laptop open next to him on his desk in a home office environment.
Bank Shares

Why does Macquarie think the big 4 ASX bank shares are 'on borrowed time'?

With Australian interest rates likely to fall, the banks face compressed margins in the medium term.

Read more »

Bank building in a financial district.
Bank Shares

What happened with the big four ASX 200 bank stocks in April?

CBA led the charge among the ASX 200 bank stocks in April. But why?

Read more »

A young male ASX investor raises his clenched fists in excitement because of rising ASX share prices today
Bank Shares

Why did CBA shares jump over 10% in April?

It was a great month for owners of this banking giant's shares.

Read more »

Happy young woman saving money in a piggy bank.
Bank Shares

Which big 4 ASX bank share does Macquarie currently prefer?

Here’s why Macquarie likes this bank the most.

Read more »

Bank building with word Bank on it.
Bank Shares

ASX bank shares outperformed in April. Will this continue according to Macquarie?

What drove the strong performance by banks in April?

Read more »

a couple and their baby sit together at their computer carrying out digital transactions and smiling happily.
Bank Shares

3 things about BOQ stock every smart investor knows

This smaller bank has aspirations to become a larger competitor.

Read more »

Man raising both his arms in the air with a piggy bank on his lap, symbolising a record high.
Bank Shares

CBA shares reach new all time high after 4% surge

CBA shares have done it again.

Read more »

Bank building in a financial district.
Bank Shares

Would I buy ANZ shares right now?

Would the bank be a good investment right now?

Read more »