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ANZ slides as Goldman Sachs dumps 'buy' rating

Robert Guy

ANZ shares are lower in early trade after Goldman Sachs dropped its rating on the lender to 'neutral' from 'buy'.

Despite a modest lift in earnings estimates for the 2021 and 2022 financial years - up 0.3 per cent and 0.2 per cent respectively - and an 11.2 per cent rise in its target price to $20.02, the broker downgraded the stock given limited upside to its new target.

Goldman Sachs has downgraded ANZ to neutral. Henry Zwartz

Goldman Sachs says since it added ANZ to its buy list on March 22 the stock has rallied 31 per cent compared to a 19 per cent gain in the S&P/ASX200 Banks Accumulation Index.

The broker says it would become more constructive on ANZ if it can achieve its $8 billion cost base target by the 2022 financial year, deliver better-than-expected repricing of
its institutional lending portfolio, and there is a quicker-than-expected recovery in
housing volume momentum.

However, it it also watching risks from lending competition and any deterioration in lending quality.

ANZ shares are down 3.7 per cent to $20.22.

(From the AFR)