ANZ Banking Group (ANZ) Share Trading Recommendation

Submitted by Craig Strzelecki on 6 February, 2007 - 23:18

ANZ Banking Group (ANZ) shares have a Buy 1 share trading recommendation and a price target of $33 from stock analyst UBS. UBS reckons the price is cheap at the moment and it's time to grab their shares while you can. They expect ANZ's Retail momentum to continue in FY07E, with sector leading Retail rev g of 16%. Significant investment in the front line should continue ANZ's "lagging waves of growth". We f'cast 07E EPS g of 11.9%, c 2% above consensus. ANZ is investing c17% of its cost base back in to the Bank. We believe flexibility to invest today will provide ANZ with a rev advantage rel to Peers in the future. ANZ has guided to cost g 5-7% to improve mkt share & drive Group rev g 7-10% (a goal also set for the NZ div). The analyst expect a (+)ve March 2nd trading update, highlighting: (1) good business vol's, (2) continued retail momentum & (3) benign NPL's. This may be slightly offset by an increase in BDD charges post-normalisation of write-backs that held BDD down in 06. We est c16bps of loans & adv in 1H07E. Forex is also expected to place a slight drag on rev, c1% due to rev hedging in the NZD & USD. They believe ANZ is cheap at an 8% sector discount. The share analyst finds the following positives for ANZ: (1) Retail banking division growth +15%, with ongoing upside (2) overweight WA, underweight NSW (3) good execution (4) solid investment spend. Risks: (1) CEO uncertainty (2) Asian investments a price to book drag.

ANZ Banking Group Limited is listed on the Australian Stock Exchange (ASX) under stock code ANZ. You can view their investor website here. ANZ was listed on the ASX on 30 September, 1969. John McFarlane is the CEO of ANZ and Charles B Goode the Chairman. ANZ is involved in general banking, mortgage and instalment lending, life insurance, property development, leasing, hire purchase and general finance, international and investment banking, investment and portfolio management and advisory services, nominee and custodian services. Find out the meaning of the recommendations in this primer. Browse for other stockbroker recommendations. Check your charts and good luck with your share trading!