ANZ share price rises after half-year earnings beat

ANZ’s half-year earnings were better than expected..
The post ANZ share price rises after half-year earnings beat appeared first on The Motley Fool Australia. –

The Australia and New Zealand Banking Group Ltd (ASX: ANZ) share price is pushing higher on Wednesday.

In afternoon trade, the banking giant’s shares are up 0.6% to $27.43.

Why is the ANZ share price pushing higher?

The catalyst for the rise in the ANZ share price today has been the release of a half-year result that revealed earnings ahead of the market’s expectations.

According to the release, the bank reported cash earnings from continuing operations of $3,113 million. This represents a 4% increase over the prior corresponding period but a 3% decline on the second half of FY 2021.

It was also well-ahead of what analysts at Goldman Sachs were expecting from the bank thanks to lower bad and doubtful debts (BDD).

Goldman commented: “ANZ reported 1H22 cash earnings (company basis) from continued operations of A$3,113 mn, which was up 4.1% on pcp and 4.6% ahead of GSe, with the beat driven by outperformance on the BDD charge.”

And while ANZ’s CET1 ratio, which fell 81 basis points to 11.53%, was softer than the broker was expecting, it hasn’t been enough to stop the ANZ share price from rising today.

Finally, ANZ’s fully franked interim dividend of 72 cents per share was in line with expectations.

Analyst call takeaways

Goldman Sachs also released a separate note with key takeaways from its analyst call.

Starting with a positive, ANZ spoke positively about its net interest margin.

Goldman said: “ANZ believes its solid 2H22 margin performance was achieved through discipline in new lending pricing through the half, as well as deposit repricing. While, price competition in AU and NZ remained intense, ANZ saw a material decline of flows into fixed rate lending through (26% in Mar-22 vs period average of 41%). “

A negative, which could impact broker valuations for the ANZ share price in the coming days, related to its cost base.

The broker advised that the bank is effectively scrapping its $8 billion cost base target by FY 2023.

It explained: “ANZ no longer believes the current environment is supportive of having an absolute cost target and so it is effectively walking away from its A$8 bn exit run-rate cost base by FY23E. Furthermore, ANZ expects its 2H22 costs to be about in line with 1H.”

“Management would not be drawn on where both run-the-business and investment spend will ultimately settle at but does expect that the extent to which investment spend is expensed will be more consistent with 1H22 levels (i.e. 88%) than historical levels (70-75%) given the nature of investment going forward will be less about building assets, and focus more on cloud-based enterprises.”

Are ANZ’s shares in the buy zone?

As things stand, Goldman Sachs sees a lot of value in the ANZ share price. It currently has a buy rating and $32.51 price target on the bank’s shares.

However, as mentioned above, once analysts have updated their financial models, this recommendation and valuation could change.

The post ANZ share price rises after half-year earnings beat appeared first on The Motley Fool Australia.

Should you invest $1,000 in ANZ right now?

Before you consider ANZ, you’ll want to hear this.

Motley Fool Investing expert Scott Phillips just revealed what he believes are the 5 best stocks for investors to buy right now… and ANZ wasn’t one of them.

The online investing service he’s run for over a decade, Motley Fool Share Advisor, has provided thousands of paying members with stock picks that have doubled, tripled or even more.* And right now, Scott thinks there are 5 stocks that are better buys.

*Returns as of January 13th 2022

More reading

ASX 200 midday update: ANZ higher on results, Flight Centre and JB Hi-Fi sink following updates
Why ASX 200 bank shares are in the spotlight
ANZ share price on watch amid $3.1bn half-year cash profit
5 things to watch on the ASX 200 on Wednesday
Here’s how some of the biggest ASX 200 shares are responding to the RBA’s rate rise

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 Scott Phillips.

Trade The World Anywhere & Anytime!

Mobile app platform with over 50,000 global listed securities across 12 markets (over 70% global market capitalisation), right from your Android or iOS device.

Integrated with exclusive trading idea and investment analysis tools to help you find actionable insight on virtually every financial instrument across our 12 global markets, to help you optimise your trading strategies.

Refer Your Friends

Tell your friends about Monex and gift them FREE access to our trading tools.

  • This field is for validation purposes and should be left unchanged.

We respect your privacy and will only send this one email notification to your friends. 

Share With Your Friends

Share on facebook
Share on twitter
Share on linkedin

Monex Trading Tools Access and Usage Terms

The Monex Trading Tools (referred to as ‘tools’ hereafter) are available to you inside your client portal;

To activate access to the tools, you must have a verified and approved trading account and have made a deposit of at least AUD $1000.

An active and funded account with a positive trading balance is required to continue to have access to the tools;

Although the tools are available to you indefinitely, Monex Securities may at it’s discretion disable access to the tools in the future;

Monex securities reserves the right to change these terms and conditions from time to time, as it sees fit, without notice.

Important Notice
iOS & Android - 12 International Markets & Over 70% Global Market Cap. $0 Brokerage On US & HK* Trades. Click Here!