Several top brokers have re-rated Commonwealth Bank of Australia (ASX: CBA) and ANZ Group Holdings Ltd (ASX: ANZ) shares after the major banks stunned the market with their earnings reports this week.
On Friday, CBA shares continue to ride the momentum generated by the bank's 1H FY26 report, released on Wednesday.
The CBA share price lifted 0.29% to an intraday high of $179.27 apiece this morning.
But the stock reversed course this afternoon, with CBA shares currently 1.9% lower for the day at $175.42.
ANZ shares have had a topsy-turvy day, rising 1.5% to a record $40.95 this morning before pulling back to $40.75 currently, up 1%.
Meantime, the S&P/ASX 200 Index (ASX: XJO) is down 1.4% to 8,914.30 points as the rest of the market takes a breather.
Let's find out what the brokers thought of these banks' reports, and how their ratings and 12-month share price targets have changed.
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CBA shares: How are they rated now?
CBA surprised analysts and investors alike with a 6% increase in cash profit to $5.45 billion for 1H FY26.
The bank declared a fully-franked interim dividend of $2.35 per share, up 4% from 1H FY25.
CBA's net interest margin (NIM) was 2.04%, steady on an underlying basis, and return on equity (ROE) was 13.8%, up 0.1%.
The results led to CBA reclaiming its title as the No. 1 ASX 200 share by market cap from BHP Group Ltd (ASX: BHP) on Thursday.
CBA shares took the title from BHP in July 2024, and BHP shares snatched it back last month.
CBA CEO Matt Comyn said:
Our balance sheet settings remain resilient with strong levels of capital, deposit funding and provisioning given the economic backdrop and geopolitical issues.
Our financial position enables us to support lending growth, continue investing to accelerate our technology modernisation agenda and enhance our GenAI capability, and help combat fraud, scams, cyber threats and financial crime.
We continue to watch the competitive intensity and its implications across the financial system.
We are well placed to compete effectively and will continue to adjust our settings as appropriate.
Here at The Fool, we reviewed the ratings of seven analysts tracking CBA shares on Friday.
They have all reiterated their sell ratings on CBA shares.
Some have lifted their 12-month price targets, but those targets are nowhere near where CBA shares are trading today.
Jeffries raised its price target from $139.60 to $143. Citi lifted its target from $137 to $140.
Morgan Stanley raised its price target from $131 to $140. UBS raised its target from $125 to $130.
Ord Minnett has a target of $120, while Macquarie's is $124.
Morgans raised its CBA share price target from $99.81 to $124.26.
In a note, the broker said:
CBA delivered a meaningful beat of 1H26 earnings expectations.
We have materially upgraded our EPS forecasts after factoring in continuation of higher loan growth and benign credit loss environments.
What about ANZ shares?
ANZ also surprised the market by announcing a $1.94 billion cash profit for 1Q FY26 yesterday.
That was 75% higher than the 2H FY25 quarterly average, indicating that new CEO Nuno Matos is doing something right.
The strong profit was driven by higher revenue and lower expenses.
The operating income was $5.7 billion, up 4% on the 2H FY25 quarterly average, while operating expenses fell 21% to $2.8 billion.
Matos said:
The quarterly result highlights the early progress we are making in executing our ANZ 2030 strategy.
Our productivity program aimed at removing duplication and simplifying the bank is well underway, delivering a significant reduction in expenses while growing revenue.
Looking ahead, we continue to be fully engaged in executing our ANZ 2030 strategy.
This is the beginning of our five-year journey to become the best bank for customers and shareholders in Australia and New Zealand.
We found a mixed bag of ratings from seven analysts covering ANZ shares on Friday.
Morgan Stanley upgraded its rating on ANZ shares to a buy with a 12-month target of $36.30.
Morgans downgraded its rating from trim to sell and increased its target slightly from $32.57 to $32.65.
The broker said:
On face of it, the 1Q26 trading update suggested ANZ was tracking ahead of 1H26 growth expectations.
However, the beat was driven mostly by the speed of cost-out and will unlikely affect consensus expectations as ANZ retained its FY26 cost guidance of c.$11.5bn.
We estimate ANZ is trading on 1.8x P:TBV, 16x PER, and 4.1% cash yield (partly franked), all stretched against historical trading ranges.
The remaining analysts reiterated their previous ratings, with some adjustments to price targets.
Citi maintained a buy rating on ANZ with a share price target of $40.30.
Ord Minnett has a sell rating with a price target of $33.
UBS is also sell-rated but lifted its target from $35 to $36.50.
Jefferies kept its hold rating on ANZ shares with a price target of $34.55.
Macquarie also recommends holding the ASX 200 bank share with a price target of $37.
Despite the increases on some price targets, ANZ shares are trading ahead of even the most optimistic valuations.
