The ANZ Group Holdings Ltd (ASX: ANZ) share price is up 0.76% to $29.02 at the time of writing.
Meantime, the S&P/ASX 200 Index (ASX: XJO) is up 0.86% to 7,766.8 points as the market awaits the next Reserve Bank interest rate decision later today.
There is no official news from ANZ today.
ANZ and the other big ASX 200 bank shares have had a remarkable run of price growth since the early Santa Rally began in November last year.
The chart below shows what's happened over the past seven months.
The strong run-up in share prices has led to valuations being "overstretched", according to Ray David from Blackwattle Partners.
National Australia Bank Ltd (ASX: NAB) shares hit a nine-year high last week, and Commonwealth Bank of Australia (ASX: CBA) shares have once again reset their all-time high at $127.75 this morning.
Goldman Sachs says most investors should consider locking in their gains and moving on.
In a recent note, the broker said:
… while the deterioration in earnings appears to now be finished, we see very limited upside risk, and therefore, with valuations skewed asymmetrically to the downside, we now think a more negative view on the banks is appropriate …
The broker has sell ratings on CBA and Westpac Banking Corp (ASX: WBC) shares.
As my colleague Zach reports, Goldman is concerned about valuation and risks in technology disruption for both of these ASX 200 bank shares.
In a note, the broker said: "We don't think [CBA stock] justifies the extent of its valuation premium to peers".
It has a neutral rating on NAB due to its solid fundamentals but stretched share price.
Meanwhile, ANZ shares get a buy rating.
What do the experts say about the ANZ share price?
Goldman analysts Andrew Lyons and John Li said the ANZ share price trades at a discount to the sector (ex-dividend adjusted).
They explained other factors in their buy rating as follows:
We are Buy-rated on ANZ given i) we are seeing evidence of ANZ's ability to derive productivity benefits (A$201 mn in 1H24) and management noted there remains a large pipeline available which can be used to offset cost inflation.
Furthermore, ii) the improving profitability of ANZ's Institutional business remains a key driver of our positive investment thesis.
We continue to see upside for Group returns due to accretive mix shifts in the Institutional business towards higher ROE Payments and Cash Management business.
Dylan Evans from Catapult Wealth also notes ANZ's more attractive price-to-earnings (P/E) ratio. He says the ANZ share price represents the best value among the bank shares, but he rates it a hold for now.
He explains on The Bull:
The ANZ offers the best value of the major banks, in our view.
The acquisition of Suncorp's banking division paints a brighter outlook, as it will add important retail exposure to the mix.
The group was recently trading at a price/earnings discount to peers, and on an attractive fully franked dividend yield above 6 per cent.
ANZ share price snapshot
ANZ shares have soared by 22.95% over the past 12 months, while the ASX 200 has risen 6.52%.
