Anyone who bought ANZ Group Holdings Ltd (ASX: ANZ) shares near their 52-week low of $32.46 would be sitting on a pretty decent gain today.
The banking giant has recovered more than 16% from that level, with its shares gaining around 13.5% over the past year and almost 7% since January.
Wednesday hasn't been quite as positive, with the ANZ share price slipping 1.05% to $37.75 in midday trade.
That leaves the stock around 8% below its 52-week high of $41.
While ANZ has made progress with its turnaround, I think much of that improvement is already reflected in the share price.
Here's why.
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ANZ's turnaround is gaining traction
ANZ's latest quarterly results show some encouraging signs, although earnings growth remains fairly modest.
In its August trading update, ANZ reported cash profit of $1.90 billion, up just 1% compared with the quarterly average from the first half.
However, excluding a provision relating to a New Zealand class action, cash profit increased 5% to $1.98 billion.
Business and Private Banking lending grew 4%, while net interest income from its core banking operations increased 2%.
Operating expenses also fell 3% after excluding the legal provision, with management continuing to target a 5% reduction in annual costs.
Meanwhile, ANZ is progressing with its integration of Suncorp Bank, with customer migration scheduled for completion by June 2027.
The bank expects the integration to deliver approximately $500 million in annual pre-tax cost savings by FY29.
Is ANZ getting too expensive?
At $37.75, ANZ is trading on a price-to-earnings (P/E) ratio of around 19.3, with a trailing dividend yield of approximately 4.4%.
The dividend is appealing, but I'm not convinced the current valuation leaves much room for further upside.
TipRanks has an average 12-month price target of approximately $35.40 across 8 analysts, implying around 6% downside from today's price.
The ratings are fairly mixed, with 3 buys, 4 holds, and 1 sell.
Citi is among the more optimistic brokers, with a $39.25 price target, while Macquarie has a $33.50 target.
Personally, I think ANZ needs to show more meaningful earnings growth before I'd be comfortable paying close to 20 times earnings.
Would I buy ANZ shares today?
Not at $37.75 apiece.
I'd be more interested if the share price pulled back towards $35, particularly if the bank continues delivering on its turnaround plans.
The next opportunity to assess that progress comes in November, when ANZ is scheduled to release its FY26 results.
