If Aussie bank stocks were hosting a party in 2025, ANZ Group Holdings Ltd (ASX: ANZ) has been one of the last ones still dancing.
After surging roughly 28% in the past 12 months, ANZ shares have left many investors asking: Is this a breakout, or did we just celebrate too early?
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Strong loans, new CEO's playbook
ANZ's stellar performance this year has a few clear beats behind it. Strong loan and deposit growth surprised markets mid-year. Retail and commercial segments outperformed modest expectations, enough to give the ANZ share price a lift.
A fresh strategic playbook from new CEO Nuno Matos, with a focus on digital push, cost savings and sustainability goals, has also sparked optimism that ANZ isn't just another old-school bank. Investors love growth plans with tech and cost cuts, even if the real work is yet to show up in profit tables.
Another tailwind? A resilient economic backdrop in ANZ's key markets: growing business confidence in New Zealand supports its cross-Tasman earnings engine.
What's not to love?
Before you crown ANZ king of the big four ASX banks, there are some less-sparkly details bubbling under the surface.
Despite the headline rally, ANZ's latest full-year results showed cash profit falling and net interest margins under squeeze. Some evidence that strength isn't uniform across the business.
Mortgage and deposit growth also have lagged peers. Massive restructuring and ambitious digital overhaul plans might be exciting on slides, but execution is a notoriously shaky part of big bank turnarounds.
Only last week, the Australian Securities and Investments Commission (ASIC) announced that the Federal Court had ordered ANZ to pay a record $250 million penalty. This is for compliance breaches and systemic risk management failures, and an expensive reminder that reputational risks can weigh on valuations too.
What next for ANZ shares?
Analysts today are decidedly measured on ANZ shares' prospects. Macquarie maintains a neutral stance with a target of $35, almost 3.5% below the current price of $36.27.
Other notes from brokers suggest that ANZ may be relatively cheap compared to its big four peers on certain metrics. However, that cheapness reflects real structural challenges, like cost inefficiencies and competitive headwinds.
TradingView data shows that most market watchers recommend the banking giant as a hold. The average 12-month price target is 4.5% below the current share price.
The forecasts seem to imply that the $108 billion banking stock is running out of steam. The most positive analyst rating is $40.40, representing a potential gain of 11%, while the most pessimistic broker predicts a 25% decline in ANZ shares over the next 12 months.
