Is the ANZ share price heading lower?
The post ANZ (ASX:ANZ) share price named as a sell by leading broker appeared first on The Motley Fool Australia. –
The Australia and New Zealand Banking GrpLtd (ASX: ANZ) share price has smashed the market in 2021.
Since the start of the year, the banking giant’s shares are risen by a sizeable 23.5%.
This is almost double the return of the S&P/ASX 200 Index (ASX: XJO) over the same period.
Can the ANZ share price go higher?
One leading broker that isn’t convinced the ANZ share price can keep climbing is Citi.
According to a note out of the investment bank this week, its analysts have downgraded the bank’s shares to a sell rating and reduced the price target on them to $28.00.
This compares to the latest ANZ share price of $28.47, which implies modest downside of 2% before dividends.
Why did Citi downgrade ANZ’s shares?
The broker made the move after looking through recent updates from some its rivals.
It believes the updates are pointing to weakness in ANZ’s Markets revenues, which have been driving its core profits recently.
In light of this, the broker suspects ANZ could fall well short of consensus expectations in FY 2021.
Citi explained: “Recent peer results suggest a sharp reversal of Markets revenues, and we now expect 2H 2021 core profit to miss consensus estimates by 9%.”
Is anyone more positive?
The team at Morgans are a lot more positive on the ANZ share price.
Its analysts currently have an add rating and $34.50 price target on its shares. This implies potential upside of 21% over the next 12 months before dividends.
Morgans recently said: “We believe ANZ is the most compelling of the major banks on a valuation basis. We expect ANZ to benefit the most of the major banks from the tailwinds currently in place for treasury and markets income. We expect ANZ to continue to focus on absolute cost reduction over the medium term. ANZ has de-risked its loan book over recent years –particularly its institutional loan book –such that the quality of its loan book has increased.”
Time will tell which broker made the right call.
Should you invest $1,000 in ANZ right now?
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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 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.