The Australia and New Zealand Banking GrpLtd (ASX: ANZ) share price has been a strong performer in 2021.
Since the start of the year, the banking giant’s shares are up 20% to $27.62.
This is close to double the return of the S&P/ASX 200 Index (ASX: XJO) over the same period.
Can the ANZ share price keep climbing?
The good news is that one leading broker believes there is still a lot more upside for the ANZ share price over the next 12 months.
According to a recent note out of Morgans, its analysts have an add rating and $34.50 price target on the company’s shares.
Based on the current ANZ share price, this means potential upside of 25% over the next 12 months before dividends.
And if you include the $1.65 per share fully franked dividend the broker is forecasting in FY 2022, this potential return stretches to almost 31%.
Why is Morgans bullish?
The note reveals that Morgans is bullish on the ANZ share price due to its attractive valuation and the bank’s cost reduction plans.
Combined with a big improvement in the quality of its loan book, the broker believes this makes ANZ the best option among the major banks right now.
It commented: “We believe ANZ is the most compelling of the major banks on a valuation basis. We expect ANZ to continue to focus on absolute cost reduction over the medium term. ANZ has de-risked its loan book over recent years – particularly its institutional loan book – such that the quality of its loan book has improved. While ANZ’s Australian home loan book has been growing below system over recent months, we expect a disciplined margin performance from ANZ.”
All in all, the ANZ share price may be smashing the market this year, but Morgans doesn’t believe it is too late to invest.
The post This analyst sees 25% upside for the ANZ (ASX:ANZ) share price appeared first on The Motley Fool Australia.
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More reading
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- ANZ (ASX:ANZ) share price edging higher amid lending blitz
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- A look at insider buying among ASX 200 big four bank shares
- 2 of the best ASX share ideas according to this leading broker
Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.
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