ANZ: Profit Margins And Cost Controls Will Drive Performance Amid Sector Challenges

Analysts have increased their price target for ANZ Group Holdings to $35.17 from $34.24, citing improved profit margins and expectations for continued operational efficiency, even though revenue growth forecasts are slightly slower.

Analyst Commentary

Recent research updates reflect a mix of optimism and caution regarding ANZ Group Holdings' prospects. Analysts considered both margin improvements and sector dynamics when updating their outlooks.

Bullish Takeaways

• Bullish analysts point to enhanced profit margins and operational efficiencies as primary drivers behind the increased price target.
• Expectations for continued disciplined cost management are supporting further improvements in core profitability.
• There is a view that resilience in the business model, especially during sector headwinds, will enable ANZ to sustain strong shareholder returns.
• Some see digital transformation and the company’s adaptability as positioning ANZ for incremental growth opportunities, even as revenue growth moderates.

Bearish Takeaways

• Bears remain concerned over the slightly slower pace of forecasted revenue growth, which could weigh on valuation expansion.
• There is caution around mixed sector fundamentals and the possibility that broader market challenges could pressure near-term results.
• Ongoing competition and consolidation in financial services could create execution risks as the company seeks to win market share.

What's in the News

• ANZ Group Holdings will propose amending its constitution at the AGM in December 2025, introducing a new clause permitting shareholders to make non-binding, advisory resolutions of material relevance. (Key Developments)
• The company completed a share buyback program, having repurchased over 39 million shares, equal to 1.32% of its issued capital, for AUD 1.17 billion as of October 2025. (Key Developments)
• ANZ reached an agreement with ASIC to resolve five regulatory matters, incurring penalties totaling $240 million related to issues including Treasury Bond execution, inaccurate reporting, failure to pay certain customer interest, handling of hardship notices, and obligations concerning deceased estates. (Key Developments)
• A simplification initiative will result in approximately 3,500 employees departing by September 2026. The bank is prioritizing focus on critical business areas, reducing internal complexity, and limiting impacts to frontline customer-facing roles. (Key Developments)

Valuation Changes

• The Fair Value Estimate has increased slightly from A$34.24 to A$35.17, reflecting analysts’ revised outlook for the company.
• The Discount Rate has decreased marginally from 7.82% to 7.80%, indicating a small reduction in perceived risk or cost of capital.
• The Revenue Growth Forecast has fallen from 4.32% to 3.58%, signifying tempered expectations for top-line expansion.
• The Net Profit Margin has improved from 32.73% to 33.29%, suggesting greater profitability on projected revenues.
• The Future P/E ratio has risen modestly from 16.13x to 16.51x, implying a slightly higher valuation multiple being assigned to future earnings.