Why the ANZ (ASX:ANZ) share price is storming higher today

The Australia and New Zealand Banking GrpLtd (ASX:ANZ) share price is storming higher on Thursday. Here’s what this broker thinks…
The post Why the ANZ (ASX:ANZ) share price is storming higher today appeared first on The Motley Fool Australia. –

A young man pointing up looking amazed, indicating a surging share price movement for an ASX company

It certainly has been a positive day for the Australia and New Zealand Banking GrpLtd (ASX: ANZ) share price.

In afternoon trade, the banking giant’s shares are up 3.5% to $26.72.

This leaves the ANZ share price trading within sight of its 52-week high of $27.29.

Why is the ANZ share price charging higher?

Investors have been buying ANZ shares on Thursday following the release of its first quarter update this morning.

For the three months ended 31 December, the banking giant reported unaudited cash earnings from continuing operations of $1,810 million. This was an impressive 54% jump on the average of the last two quarters of FY 2020.

Also giving the ANZ share price a boost was news that the bank is reversing some COVID-19 provisions. Today’s update included a COVID-19 collective provision release of $173 million.

This represents ~10% of the $1,700 million set aside during FY 2020. Though, management may not be done there. At this point, it feels this release is prudent when balancing the improvement in the economic outlook at the end of the December quarter with the level of ongoing uncertainty.

This appears to hint that if things continue to improve, further releases could be made in the coming quarters.

How does this compare to expectations?

According to a note out of Goldman Sachs, ANZ’s cash earnings result was better than it was expecting. It notes that this was largely due to a significant outperformance in bad and doubtful debts.

The broker was also pleased to see that its pre-provision operating profit (PPOP) was running ahead of what its analysts were forecasting for the first half.

Another positive was the bank’s expenses, which were flat versus the second half quarterly average.

And finally, ANZ’s CET1 ratio of 11.7% is running well ahead of what Goldman is forecasting for the first half. It notes that this is being driven by better profitability and lower credit risk-weighted assets.

Is the ANZ share price in the buy zone?

Although the company is outperforming Goldman Sachs’ estimates, at this point, it still doesn’t see enough value in the ANZ share price to recommend it as a buy.

For now, the broker has retained its neutral rating and $24.43 price target.

Though, this could change in the coming days once the broker has had chance to fully digest the result.

Where to invest $1,000 right now

When investing expert Scott Phillips has a stock tip, it can pay to listen. After all, the flagship Motley Fool Share Advisor newsletter he has run for more than eight years has provided thousands of paying members with stock picks that have doubled, tripled or even more.*

Scott just revealed what he believes are the five best ASX stocks for investors to buy right now. These stocks are trading at dirt-cheap prices and Scott thinks they are great buys right now.

See The 5 Stocks

*Returns as of February 15th 2021

More reading

Motley Fool contributor James Mickleboro 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.

The post Why the ANZ (ASX:ANZ) share price is storming higher today appeared first on The Motley Fool Australia.

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.

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 App - 12 International Markets & Over 70% Global Market Cap. $0 Brokerage On US Trades. Click Here!