ANZ Group Holdings Ltd (ASX: ANZ) shares are recovering on Tuesday.
In afternoon trade, the banking giant's shares are up 0.5% to $24.82.
However, despite this gain, the ANZ share price remains down by over 2.5% this week.
Is this a buying opportunity for investors? Let's have a look at what one leading broker is saying following the bank's FY 2023 results.
Are ANZ shares a buy?
According to a note out of Goldman Sachs, it believes investors should be taking advantage of the pullback to buy the bank's shares.
In response to its full-year results, the broker has retained its conviction buy rating with a trimmed price target of $26.66. This implies a potential upside of 7.5% for investors from current levels.
In addition, Goldman continues to forecast $1.62 per share dividends in FY 2024, FY 2025 and FY 2026. This will mean a dividend yield of 6.5% over the next 12 months.
What did the broker say?
Although Goldman concedes that ANZ's results were a touch on the weak side, it remains positive due to its institutional banking business. It said:
We revise our FY24/25/26E EPS by -6.7%/-7.1%/-6.8%, driven by: i) lower NIMs driven by the lower 2H23 starting point, partially offset by ii) higher other operating income, and iii) lower BDDs. As a result our 12-month TP moves to A$26.66 (from A$27.38).
We reiterate our Buy (on CL) on ANZ, given: i) the FY23 result provided further evidence of ANZ's improving profitability of its Institutional business and in particular we note its Transaction Banking profits have reached an all-time high, while also with improved ROE, ii) we see further upside risk to ANZ Group returns from mix shifts in its Institutional division, iii) our assessment of the profitability of this division (here) concludes that these return improvements are largely sustainable, and iv) the stock is trading at a 29% discount to peers on 12-mo fwd PPOP, vs. 14% 15-yr average.
