ANZ Group shares (ASX: ANZ) paint a mixed picture, as the 3.18% loss of today brings the price back to where it began 2025. Neutral on the year is not all bad, with ANZ navigating the Australian banking landscape better than it’s peers over the same period. CBA, (-3.22%), NAB (-9.3%), and Westpac (-4.1%) are all in negative territory YTD, offering glimmers of optimism for ANZ, however longer-term forecasts and shifting market sentiment introduce a degree of caution.

The stock’s recent cross to the downside of its 200 day moving average by the 50-day moving average could be interpreted as a bearish signal by technical analysts.

The bank’s recent financial performance provides a solid foundation. ANZ reported a half-year earnings per share (EPS) of AUD 1.04, in line with analyst expectations, and a robust half-year revenue of AUD 10.40 billion. Looking ahead, the next quarter’s EPS is estimated at a healthy 1.13 AUD. UBS projects a strong FY25 for ANZ, fueled by an anticipated revenue of $22.5 billion and a statutory net profit of $7.2 billion – a significant 10% year-on-year increase. This optimistic outlook is significantly bolstered by the recently completed acquisition of Suncorp Bank (August 2024), a strategic move expected to provide greater scale and geographic diversification.

However, the crystal ball becomes cloudier beyond FY25. UBS forecasts for FY26 project a continued, albeit moderate, revenue increase to approximately $22.9 million, accompanied by a slight dip in net profit to $7.17 billion. FY27 sees a potential rebound in both revenue ($23.3 billion) and net profit ($7.28 billion). Yet, FY28 presents a potential cause for concern, with UBS predicting a decrease in net profit to $6.66 billion, despite a revenue increase to $22.9 billion. This suggests potential margin compression, increased operational costs, or perhaps a more conservative outlook on loan growth and asset quality.

The analyst community reflects this mixed outlook. The consensus price target hovers around AUD 29.9, indicating a view that the stock is relatively well priced at it’s current level.

 

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ANZ’s dividend history adds another dimension to the investment case. The bank has a track record of semi-annual dividend payments, with the last payment being $0.83 per share (70% franked) in December 2024. The 2024 dividend yield stood at 5.45%, with a payout ratio of 76.16%. The availability of a dividend reinvestment plan (DRP) offers investors an option to automatically reinvest their dividends.

Whilst returning to neutral on the YTD on a downwards day for the stock cannot be viewed as bullish, bulls may be pacified somewhat by the fact that ANZ continues to outperform it’s peers and the broader market (ASX 200 down 3.15%) over the same period. Time will tell how this one plays out, but for now, there are certainly worse names out there.