ANZ Group Holdings Ltd (ASX: ANZ) shares will be watched closely next week.
That's because the banking giant will be releasing its eagerly anticipated full year results on Friday 8 November.
Ahead of the release, let's take a look at what the market is expecting from the big four bank.
ANZ FY 2024 results preview
For the 12 months, analysts at Goldman Sachs are expecting ANZ to report a 4.8% increase in average interest earning assets to $1,021,889 million.
However, with the broker believing that intense competition will drive down the bank's net interest margin (NIM) from 1.7% to 1.58%, its net interest income is forecast to fall 2.4% to $16,182 million.
This is expected to lead to a small year on year decline in operating revenue to $20,762 million.
From this, the broker is forecasting a pre-provision operating profit of $10,123 million (down 6%) and cash earnings of $6,892 million (down 7%).
What about dividends?
Unfortunately, Goldman believes that ANZ's profit decline will mean that its board is forced to cut its dividend in FY 2024.
The broker expects the bank to pay total dividends of $1.66 per share in FY 2024. This represents a decline of 5% from $1.75 per share in FY 2023. This represents a payout ratio of 72%, up from 71% a year ago.
And based on the current ANZ share price of $31.15, it equates to a 5.3% dividend yield.
Should you buy ANZ shares?
Prior to suspending coverage on ANZ due to the exit of its analyst, Goldman had a buy rating and $29.45 price target on its shares. It said:
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. Finally, the stock still trades at a discount to the sector (ex-dividend adjusted).
However, this rating is no longer active, so let's see what others are saying.
UBS is the most bullish broker out there with a buy rating and $32.00 price target. Though, this price target implies only 3% upside from current levels.
Elsewhere, Morgan Stanley has an underweight rating and $27.50 price target and Morgans has a hold rating and $26.13 price target.
