ANZ Group Holdings Ltd (ASX: ANZ) shares were under pressure on Thursday.
The banking giant's shares tumbled after the market responded negatively to the release of its half year results.
Is this a buying opportunity for investors? Let's find out what analysts at Macquarie Group Ltd (ASX: MQG) are saying about the big four bank.
What is the broker saying?
According to a note out of the investment bank this morning, its analysts felt ANZ's underlying result was weak, highlighting that lower bad debts masked lower than expected revenue and softer margins and volumes. It said:
At the headline level, ANZ's 1H25 result was broadly in line with expectations, supported by low BDDs. However, the underlying result was weaker, as revenue fell short of our forecast by ~2% due to weaker margins and volume. The capital position was also softer than expected, and ANZ bucked the trend by opting not to neutralise the DRP, resulting in additional dilution. We believe the new CEO is likely to review ANZ's capital strategy, and we have incorporated a dividend cut in 2H25.
And while the banking giant's costs were lower than expected, Macquarie believes this is due to the timing of its investments. It adds:
Expenses were lower than expected, largely driven by the timing of investment spend. However, ANZ maintained its guidance for ful lyear cost growth, implying 2H25 growth of ~7% as investment spend ramps up. While the timing of investment spend may create volatility in expenses, with the new CEO starting next week and substantial work still needing to be completed on both integration and the ANZ Plus rollout, we see limited scope for 2H25 costs to decrease in 1H26, suggesting additional pressures on pre-provision earnings in FY26-27.
Are ANZ shares a buy?
Macquarie continues to sit on the fence when it comes to ANZ shares.
In response to its half year results, the broker has reaffirmed its neutral rating with a trimmed price target of $27.50.
Based on its current share price, this implies potential downside of approximately 6.5% for investors over the next 12 months.
Commenting on its neutral recommendation, the broker said:
ANZ trades at ~13x forward P/E, representing an 18-19% discount to NAB and WBC. Despite trading at a substantial relative discount to peers, we expect the market to remain cautious about the outlook, and this result is unlikely to provide a catalyst for re-rating. Maintain Neutral.
