Morgan Stanley expects cash profit to be flat for two years. The capital release from asset sales should position the bank to undertake around $3bn in buybacks in 2018 and 2019 and maintain modest growth in earnings per share and dividend.
The broker is less confident in the revenue recovery for ANZ, given the impact of institutional re-balancing, non-core asset sales and weaker-than-peer margin outcomes in Australian banking.
Rating is Equal-weight. Target is raised to $29.00 from $28.50. Sector view is In-Line.
Target price is $29.00.Current Price is $28.67. Difference: $0.33 – (brackets indicate current price is over target). If ANZ meets the Morgan Stanley target it will return approximately 1% (excluding dividends, fees and charges – negative figures indicate an expected loss).