Credit Suisse points out ANZ’s recent announcement, that it may have been too conservative in its approach to mortgage lending, has been interpreted by some that this is an inflection point for growth.
The broker suggests this is not the case and the earliest there is likely to be a change is at the end of FY19.
The broker also suspects the bank may pause capital management, and it may be less than expected. Credit Suisse assesses the next initiative is not likely until FY20 and decreases buyback estimates by $1.5bn.
Earnings estimates are downgraded by -3-8% over the forecast period and the target reduced to $28 from $30. Rating is downgraded to Neutral from Outperform.
Target price is $28.00.Current Price is $27.14. Difference: $0.86 – (brackets indicate current price is over target). If ANZ meets the Credit Suisse target it will return approximately 3% (excluding dividends, fees and charges – negative figures indicate an expected loss).