The Australia and New Zealand Banking GrpLtd (ASX: ANZ) share price has been a strong performer in 2021.
Since the start of the year, the banking giant’s shares have risen a sizeable 21%.
Can the ANZ share price keep climbing?
With the ANZ share price rising so strongly this year, investors will no doubt be wondering if it is too late to invest.
The good news is that one leading broker doesn’t believe it is. In fact, it still sees decent upside ahead for ANZ shares over the next 12 months.
According to a recent note out of Goldman Sachs, its analysts have retained their buy rating and lifted their price target on the company’s shares to $30.50. This implies potential upside of 9% between now and this time next year excluding dividends.
In addition, Goldman Sachs is forecasting fully franked dividends per share of $1.40 in FY 2021 and $1.45 in FY 2022. Based on the current ANZ share price of $28.00, this will mean yields of 5% and 5.2%, respectively, over the next two years.
Combining Goldman’s price target and dividend forecasts, ANZ shares are expected to provide investors with a total return of over 14% over the next 12 months.
Why is Goldman positive on ANZ?
Goldman likes ANZ for a number of reasons. This includes its net interest margin (NIM) management, growth prospects, valuation, and yield.
It explained: “ANZ’s NIM is being very effectively managed in the face of weaker volumes; a trend we expect to continue through FY21E. The resulting revenue pressures, which are also being adversely impacted by fees (and Markets in 1H21), should be offset by productivity benefits in outer years.”
“The stock is trading more than one standard deviation cheaper versus the sector on PPOP multiples (24% discount vs. 11% long-run average discount), despite our expectations that it will deliver 5% PPOP/share CAGR in the two years to FY23E (with upside from capital management), with a c. 5% dividend yield,” it added.