With earnings already under pressure from ultra-low rates, the likelihood of further unconventional measures implies another step down. Macquarie notes that while the jury is out on the effectiveness of QE, consensus suggests it hurts bank profitability.
The broker has cut earnings forecasts for the sector. ANZ Bank’s target falls to $21.00 from $24.50. Underperform retained.
Sector: Banks.
Target price is $21.00.Current Price is $16.95. Difference: $4.05 – (brackets indicate current price is over target). If ANZ meets the Macquarie target it will return approximately 19% (excluding dividends, fees and charges – negative figures indicate an expected loss).
