It has been a busy month for the big four banks, with all the majors releasing updates.
The good news for their shareholders is that these updates have gone down well with the market, driving their shares higher.
But is it too late to invest? Let's see what Morgans is saying about the big banks:
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ANZ Group Holdings Ltd (ASX: ANZ)
Morgans highlights that ANZ's quarterly update suggests that it is performing ahead of expectations. However, this outperformance was driven by cost-outs. While this would ordinarily be good news, Morgans notes that management has retained its cost guidance for the full year.
In light of this and recent share price strength, the broker has downgraded ANZ shares to a sell rating with a $32.65 price target. It 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 make minor adjustments to FY26-28F EPS, reflecting 1Q26 Markets revenue strength, impairment charges lower than expected (but off an already low base), and higher shares on issue (DRP uptake was higher than assumed). 12-month target price $32.65 (+8 cps).
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. Given the recent share price strength, we downgrade our rating from TRIM to SELL with a potential TSR of -15%.
Commonwealth Bank of Australia (ASX: CBA)
Morgans was impressed with the performance of Australia's largest bank during the first half. It highlights that CBA's earnings were comfortably ahead of expectations, which has led to an upgrade to its forecasts.
However, due to CBA shares trading on lofty multiples, the broker has retained its sell rating with an improved price target of $124.26. It 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. We expect DPS growth won't match EPS growth as we see approaching CET1 capital tightness. Target price lifted to $124.26. SELL retained, with potential TSR of -24% (including 3% cash yield) at current elevated prices and trading multiples.
National Australia Bank Ltd (ASX: NAB)
Morgans has lifted its forecasts for NAB following its strong quarterly update. It notes that the bank is also benefitting from a supportive interest rate, credit growth, and asset quality environment.
However, once again, the broker thinks NAB shares are overvalued and has retained its sell rating with a $37.27 price target. It said:
Like its peers that reported in February, NAB's 1Q26 trading update showed it is benefitting from a supportive interest rate, credit growth, and asset quality environment. We make upgrades to our forecasts to reflect performance and outlook. 12 month target price set at $37.27/sh. With more aggressive assumptions than previously we estimate a higher fundamental value for NAB. However, the share price is still trading far ahead of this revised estimate. SELL retained, with potential TSR of -17% (including 3.6% cash yield).
Westpac Banking Corp (ASX: WBC)
Finally, Morgans is a little more positive on the investment opportunity here. In response to Westpac's quarterly update, it has upgraded its shares to a trim rating (from sell) with a $35.12 price target. It said:
A largely stable 1Q26 result compared to the 2H25 quarterly average (normalised for 2H25's restructuring charge), which is better than 1H26 expectations. We are assuming a more bullish loan growth and impairments outlook than previously (and slightly more conservative costs). There is no change to FY26F EPS but there are 5-8% upgrades to FY27-28F. Target price lifts to $35.12/sh. We upgrade to TRIM given the improved, but still negative, potential TSR.
Is anyone bullish?
While most brokers believe that ANZ, CBA, NAB, and Westpac shares are overvalued, not everyone agrees.
For example, Morgan Stanley upgraded ANZ shares to an overweight rating with a $41.30 price target.
In addition, Jefferies retained its buy rating on NAB shares with a $50.64 price target.
