ANZ (ASX:ANZ) shares rated a buy amid $125 trillion decarbonisation opportunity

Is it time to buy ANZ’s shares?

| More on:
Two male ASX 200 analysts stand in an office looking at various computer screens showing share prices

Image source: Getty Images

Australia and New Zealand Banking GrpLtd (ASX: ANZ) shares could be a buy for ESG focused investors.

That’s the view of analysts at Bell Potter, which have retained their buy rating on the banking giant’s shares this morning.

What does Bell Potter think of ANZ shares?

According to the note, the broker has retained its buy rating and $31.00 price target on ANZ’s shares.

Based on the current ANZ share price of $27.07, this implies potential upside of 14.5% for investors over the next 12 months.

But it doesn’t stop there. The broker is forecasting a generous dividend yield of 5.2% over the period. Combined, this brings the total potential return on offer with ANZ’s shares to almost 20%.

What did the broker say?

Bell Potter notes that ANZ has just held another ESG meeting and highlights that the bank is aiming to be Australia’s leading bank in supporting customer transition to net zero emissions.

Its analysts believe this has the potential to be a very lucrative market for the bank to target. And if it gets it right, it could have positive consequences for ANZ’s shares in the future.

The broker commented: “There are significant opportunities from decarbonising the economy and the bank is well positioned to facilitate to net zero emissions. This is also in line with ANZ’s clear path of driving forward with sustainable investments. So it’s not just about Australia but more so on a global basis, and especially the amount needed to spend: ~$125 trillion and with >50% in the Asia Pacific. One key element for example is the US$10 trillion needed for electric vehicle conversion. The ambition is thus to be Australia’s leading bank in supporting customer transition to net zero.”

Bell Potter accepts that this will not be an easy task but one that could generate significant benefits in the future.

It explained: “The bank’s success in supporting a net zero transmission will be largely driven by financing customers to reduce their emissions. Getting it right is the hard part however – it would probably take a long time but the benefits are massive.”

“ANZ is already working with 100 largest emitting customers to do so. Some of them have closed the gap but all have welcomed the engagement. The bank already has skills and would be able to understand the implications of sustainability better. As a prudent lender, ANZ will be judged with not loosening their credit standards. Likewise as a prudent saver, the bank has to be sure that things do not get out of hand,” it added.

All in all, combined with its strong position in business banking, Bell Potter remains bullish on ANZ’s shares and has reiterated its buy rating.

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

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.

More on Bank Shares