Morgan Stanley lowers its earnings estimates and price targets for the major banks on concerns about a weaker housing and mortgage market and a higher probability of recession.
The broker upgrades its FY22 EPS estimates to reflect better margins though lowers FY24 estimates due to weaker loan growth and larger loan losses.
Margin benefits will be partly offset, explains the analyst, by ongoing mortgage competition, rising term deposit rates, higher wholesale funding costs and deposit mix shift.
For ANZ Bank, the target price falls to $24.30 from $28.90, while the Equal-weight rating is maintained. Industry view: Attractive.
Target price is $24.30.Current Price is $21.39. Difference: $2.91 – (brackets indicate current price is over target). If ANZ meets the Morgan Stanley target it will return approximately 12% (excluding dividends, fees and charges – negative figures indicate an expected loss).