ANZ (ASX:ANZ) Valuation: Is There More Upside After Recent Shareholder Returns?

ANZ Group Holdings (ASX:ANZ) has attracted market attention this week following its recent share price activity. Investors are weighing up the bank’s performance while taking cues from its latest returns and underlying business momentum.

See our latest analysis for ANZ Group Holdings.

ANZ Group Holdings’ latest share price of $34.2 reflects steady momentum, with the stock’s one-year total shareholder return coming in at 21.9%. While recent weeks have seen incremental gains, most of the growth is still attributed to longer-term performance and changing market expectations around profitability and risk.

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The question now is whether ANZ Group Holdings’ current momentum signals untapped value for new investors, or if the market has already priced in expectations for the bank’s earnings growth and future prospects.

Most Popular Narrative: 9.5% Overvalued

ANZ Group Holdings’ recent close of A$34.20 sits noticeably above the consensus fair value estimate of A$31.23. The latest forecasts reflect only a minor shift in valuation, highlighting ongoing debate over whether current growth drivers genuinely justify the share price premium.

The completion of the Suncorp Bank acquisition is expected to yield larger and earlier synergies than initially planned. This could enhance scale and growth in Queensland, which should positively impact revenue and net margins. A significant shift towards a lower-cost, dual platform system with ANZ Plus and Transactive is intended to improve efficiency, reduce costs, and allow faster roll-out of new products. This is projected to increase market share and positively impact net margins.

Read the complete narrative.

Want to discover the catalyst behind this valuation gap? There is a bold earnings target driving analyst confidence and ambitious efficiency gains that could influence the entire sector. Interested in what makes this narrative compelling? Dive deeper to uncover the critical assumptions fueling this price prediction.

Result: Fair Value of $31.23 (OVERVALUED)

Have a read of the narrative in full and understand what's behind the forecasts.

However, execution risks related to technology investments and unexpected regulatory costs could still challenge the positive outlook for ANZ Group Holdings’ efficiency gains.

Find out about the key risks to this ANZ Group Holdings narrative.

Another View: What Does the SWS DCF Model Say?

Taking a different approach, our SWS DCF model points to a fair value of A$34.79 for ANZ Group Holdings. This suggests the shares are actually trading slightly below their intrinsic value, which contrasts with the overvalued narrative from multiples-based methods. Is this DCF optimism justified, or does it overlook potential risks?

Look into how the SWS DCF model arrives at its fair value.

Build Your Own ANZ Group Holdings Narrative

If you have a different perspective, or want to dive into the numbers yourself, you can build a personalized ANZ Group Holdings narrative in just a few minutes. Do it your way

A great starting point for your ANZ Group Holdings research is our analysis highlighting 2 key rewards and 1 important warning sign that could impact your investment decision.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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