Australia and New Zealand Bank (ANZ) News Today

Submitted by Jim Thesiger on 16 May, 2008 - 15:44

Australia and New Zealand Banking Group (ANZ) has a neutral stock recommendation with a 12 month price target of $24.38 from sharemarket analyst Macquarie Research Equities.

Australia and New Zealand Banking Group (ANZ) – Wing Lung Deal and a Prayer?!

Australia and New Zealand Bank (ANZ) and The China Merchant Bank are bidding for the 53% stake of the Wing Lung Bank which is being sold by the Wing Lung family. The Wall Street Journal reported that The China Merchant Bank is the front runner for the deal with reports they have bid HKD$180 per share. Final bids were due yesterday and it is believed that this level is well above ANZ’s interest level. MRE view this as a positive as they do not believe the Wing Lung acquisition was a good one for ANZ. Macquarie Research (MRE) believe ANZ is performing well with sound levels of capital, provisions and liquidity. MRE maintain a neutral recommendation with a 12 month price target of $24.38.

ANZ stock is trading at a 6% discount, even after gaining 2.87% to $22.95 during this morning’s trade. ANZ has underperformed the sector with the other big four banks contributing a large portion of the market’s concentrated gain in the last week on the back of further merger and acquisition speculation following the announcement of the St George Bank and Westpac merger.

With a P/E ratio of 10.7x Full Year 2009, ANZ is now looking to be the best value in the banking sector with a 12 month TSR of approximately 15%.

ANZ has a strong balance sheet position with typically higher coverage ratios for provisions. The acquisition risk related to the Wing Lung Bank bid could be negated and hence, provide the catalyst for ANZ stock to rally.