Are ANZ shares a buy or a sell?

Let's see what analysts are saying about this banking giant.

| More on:
Woman on her laptop thinking to herself.

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

ANZ Group Holdings Ltd (ASX: ANZ) shares have been in fine form in 2024.

Since the start of the year, the banking giant's shares have smashed the market with a gain of 15%.

As a comparison, the ASX 200 index is up 5% year to date.

The big question for investors is what's next for this high-flying bank stock? Especially with its shares trading within touching distance of their multi-year high of $30.23.

So, let's see what analysts are saying about this big four bank.

What's next for ANZ shares?

Analysts at Goldman Sachs have been running the rule over the bank's quarterly update. The good news is that they were pleased with what they saw. The broker said:

ANZ released its 3Q24 Pillar 3 disclosure for the quarter ended 30-Jun-24. ANZ reported a 3Q24 provision charge of A$45 mn, which was better than what was implied by prior 2H24 forecasts, and we note that while asset quality has continued to normalize, it still remains remain better than 2020 levels across a number of metrics. ANZ's balance sheet continues to grow with net loans and advances 3% higher, and customer deposits up 2%. 3Q24 CET1 ratio of 13.3% (12.0% pro-forma) had been pre-announced.

In light of this, the broker has reiterated its buy rating on the company's shares. It explains:

We reiterate our Buy rating on ANZ, given i) we continue to see evidence of ANZ's ability to derive productivity benefits (A$201 mn in 1H24) and management noted that there remains a large pipeline available which can be used to offset cost inflation. Furthermore, ii) we see upside for Group returns due to accretive mix shifts in the Institutional business towards higher ROE Payments and Cash Management business, and iii) our sector level analysis of institutional lending spreads (here) suggests a NIM tailwind into 2H24, which bodes well for ANZ given its relative skew towards institutional banking. Finally, the stock still trades at a c. 36% PER discount to the sector versus a 15-yr average discount 14%.

However, it is worth noting that Goldman's improved price target of $29.48 is actually below where ANZ shares currently trade. This could mean it is better for investors to sit tight and wait for a pullback before making an investment.

Though, analysts at UBS don't believe investors should keep their powder dry. They responded to the quarterly update by upgrading the bank's shares to a buy rating with a $32.00 price target.

This implies potential upside of almost 7% for investors. And if you add in dividends, the total return stretches to approximately 12%.

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has positions in and has recommended Goldman Sachs Group. 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 Scott Phillips.

More on Bank Shares

A young woman sits with her hand to her chin staring off to the side thinking about her investments.
Resources Shares

Should I switch my ASX 200 banking stocks for ASX 200 miners before earnings season?

The ASX 200 Index is dominated by Australia's bank and materials/mining sectors, which together account for around half of the…

Read more »

A man sits in contemplation on his sofa looking at his phone as though he has just heard some serious or interesting news.
Bank Shares

Here's when Westpac says the RBA will now cut interest rates

The RBA surprised everyone by keeping rates on hold last week. So, when will the next cut happen?

Read more »

Hand holding Australian dollar (AUD) bills, symbolising ex dividend day. Passive income.
Bank Shares

This is the ASX bank stock with the largest dividend yield right now

Looking to ASX bank stocks for dividend income right now?

Read more »

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

ASX banking sector: Is it time to consider a regional bank?

The big 4 banks are widely considered to be overvalued.

Read more »

A person leans over to whisper a secret to a colleague during a meeting.
Bank Shares

Here are the latest growth forecasts for the CBA share price

Can the bank continue rising? Here are some expert views.

Read more »

A businessman presents a company annual report in front of a group seated at a table
Bank Shares

Earnings season predictions: Macquarie weighs in on the big 4 banks

What are the broker's predictions?

Read more »

Contented looking man leans back in his chair at his desk and smiles.
Bank Shares

Major CBA investor reveals why he's all in

This investor described one major reason driving his investment in CBA shares.

Read more »

Young investor sits at desk looking happy after discovering Westpac's dividend reinvestment plan
Bank Shares

Invested $10,000 in Westpac shares 2 years ago? Guess how much you've already banked!

Atop their regular dividend payments, Westpac shares have enjoyed a strong two-year run.

Read more »