What does the future look like for the ANZ (ASX:ANZ) share price?

The bank is currently having a good time.

| More on:

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

The Australia and New Zealand Banking Group Ltd (ASX: ANZ) share price has had a great year thus far.

Shares in the banking giant have soared more than 21% since the start of the year.

By comparison, the S&P/ASX 200 Index (ASX: XJO) has only managed to claw 12.5% higher in 2021.

It's not very common to see the share price of a big bank like ANZ outperforming the broader index.

So, what is the outlook for the ANZ share price?

Woman standing with one leg on top a mountain looking over a lake

Image source: Getty Images

Can the ANZ share price keep rising?

According to a leading broker, investors can expect more upside for shares in ANZ.

A recent note published by Morgan's painted a bullish outlook, with analysts having an add rating and $34.50 price target on the bank's shares.

Analysts cited ANZ's attractive valuation and cost reduction plans for the positive outlook.

Given its strong capital position, analysts also forecast ANZ to pay out a full franked dividend of $1.65 per share in FY22.

In addition, the broker spruiked ANZ as potentially being the best option among major Aussie banks right now.

On the contrary, some experts have flagged a more bearish outlook for the ANZ share price.

According to the commentary, moderation in volume and housing growth could slow near-term growth prospects for the big banks.

Snapshot of the ANZ share price

There are several catalysts that appear to have helped propel the ANZ share price higher this year.

In May, ANZ reported a strong first-half report for FY21.

The report highlighted a 45% increase in statutory profit after tax of $2.94 billion.

Continuing operations cash profit also increased 28% for the first half to $2.99 billion.

ANZ has also highlighted improved credit conditions which resulted in the release of almost $500 million during the half.

In its recent business update for the third quarter, the banking giant noted that its CET1 ratio came in at 12.2%, a slight reduction from the 12.4% recorded in the previous period. 

With its strong capital position and cost reductions, ANZ announced its intention to buy back up to $1.5 billion of shares on market as part of its capital management plan.

The bank's buyback is also expected to reduce ANZ's CET1 ratio by a further 35 basis points.

The ANZ share price closed yesterday's trading session slightly lower at $27.61.

Motley Fool contributor Nikhil Gangaram 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.

More on Bank Shares

A judge sitting in a blurred background reaches forward to strike his gavel on the strikeplate on his judge's bench.
Bank Shares

Why Macquarie's $321 million Shield problem is back in court

Another Shield court case is giving investors something else to watch.

Read more »

A little girl stands on a chair and reaches really, really high with her hand, in front of a yellow background.
Dividend Investing

 If I invest $10,000 in CBA shares, how much passive income will I receive in FY27?

Find out what passive income you could earn off your CBA shares next year.

Read more »

Stressed businessman sits in panic amid digital stock market financial background.
Bank Shares

Down 12%: Are CBA shares a buy, sell or hold now?

Find out what brokers tip for the ASX banking giant's shares next.

Read more »

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

Westpac, ANZ, NAB or CBA shares? Which ASX bank stock should I buy for $5,000 a year in passive income?

Are ANZ, NAB, Westpac, or CBA shares a better buy for a $5,000 annual passive income?

Read more »

Numerous Australian dollar notes laid out.
Bank Shares

How many NAB shares do I need to buy for $9,000 of passive income?

NAB could be a useful option for dividends…

Read more »

A man in a suit smiles at the yellow piggy bank he holds in his hand.
Bank Shares

Is the NAB share price a buy at $38.48?

I like the combination of business banking exposure, modest earnings growth and a prospective fully franked dividend yield above 4%.

Read more »

A heart next to a pink piggy bank and coins.
Bank Shares

If I invest $15,000 in Westpac shares, how much passive income will I receive in 2027?

How much dividend cash can investors bank on next year?

Read more »

A male investor wearing a white shirt and blue suit jacket sits at his desk looking at his laptop with his hands to his chin, waiting in anticipation.
Bank Shares

Is the pullback in Westpac shares a buying opportunity?

Westpac’s dividend attracts investors, but fierce competition complicates the buy case.

Read more »