ANZ: Cost Discipline And Capital Returns Will Support Resilient Future Performance

Analysts have modestly increased their price target for ANZ Group Holdings by approximately $0.07, citing slightly stronger long term revenue growth expectations and a marginally lower discount rate that more than offset a flat profit margin outlook and only a small uptick in the assumed future P/E multiple.

Analyst Commentary

Street research sentiment around ANZ Group Holdings appears cautiously constructive, with recent valuation tweaks reflecting a balance between supportive macro trends and pockets of execution risk.

Bullish Takeaways

• Bullish analysts argue that ANZ’s diversified earnings base and solid capital position support a gradual re-rating in the stock’s valuation multiple, even if earnings growth remains moderate.
• Improved visibility on long term revenue growth, particularly from fee based and digital banking initiatives, is seen as underpinning more resilient returns across cycles.
• Ongoing cost discipline and productivity programs are viewed as key levers that can protect margins and translate incremental revenue into stronger bottom line growth.
• Supportive capital management, including potential for continued dividends and selective buybacks, is cited as a driver of total shareholder return and a floor under the valuation.

Bearish Takeaways

• Bearish analysts caution that the uplift in target price is modest, reflecting limited near term catalysts and a risk that earnings revisions could stall if loan growth slows.
• There are concerns that competitive pressures in core lending markets could cap margin expansion, constraining upside to both earnings and the valuation multiple.
• Uncertainty around regulatory settings and credit quality through the cycle is seen as a potential drag on return on equity, particularly if provisions need to normalize higher.
• Some remain wary that elevated expectations for digital and efficiency gains may prove optimistic, creating execution risk if project timelines or benefits slip.

What's in the News

• Former CEO Shayne Elliott has commenced legal action in the NSW Supreme Court over his 2025 remuneration outcomes, after the Board applied APRA CPS 511 principles to cancel his short term bonus and reduce long term variable remuneration for 2025 and 2026 to zero (Key Developments).
• At the 18 December 2025 AGM, shareholders will vote on a proposed constitutional amendment clarifying that non binding shareholder resolutions may express opinions or request information, but must be materially relevant to the business and cannot advocate unlawful action or address personal grievances (Key Developments).
• ANZ has completed a share buyback program announced on 7 May 2024, repurchasing a total of 39,465,384 shares, or about 1.32% of shares on issue, for AUD 1,174.82 million, including 263,084 shares bought between 1 April and 13 October 2025 for AUD 6.82 million (Key Developments).

Valuation Changes

• Fair Value: nudged higher from A$35.17 to A$35.24, reflecting a marginally more constructive view on intrinsic worth.
• Discount Rate: unchanged at 7.80% (7.80% to 7.80% to two decimal places), indicating a steady perceived risk profile or cost of capital.
• Revenue Growth: increased slightly from 3.58% to 3.60%, pointing to a small uplift in long term topline expectations.
• Net Profit Margin: eased fractionally from 33.29% to 33.28%, suggesting a broadly unchanged, high margin profile with a minimal downgrade to profitability assumptions.
• Future P/E: risen slightly from 16.51x to 16.54x, implying a modestly higher valuation multiple applied to forward earnings.