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Highlights
- ANZ Price Target Raised: Morgan Stanley lifts ANZ's price target to AU$29.30 from AU$27.20 but maintains an "Equal-Weight" rating.
- CBA Price Target Adjusted: Commonwealth Bank of Australia’s price target increased slightly to AU$128 from AU$127, with an "Underweight" rating maintained.
- Market Performance: ANZ shares are up 0.6% year-to-date (YTD), while CBA shares are down 6.8% YTD.
Analysts at Morgan Stanley have revised their price targets for two of Australia’s major banks, ANZ and Commonwealth Bank of Australia (CBA), citing their respective market strengths and challenges.
ANZ: Strong Institutional Performance but Risks Remain
Morgan Stanley raised its price target for ANZ from AU$27.20 to AU$29.30, highlighting the bank’s well-positioned institutional banking division, positive momentum in the local mortgage market, and strong cost discipline. Analysts also noted that ANZ has improved its risk profile and continues to trade at a significant discount to its banking peers following last year’s share price underperformance.
Despite these positives, the brokerage decided to maintain an "Equal-Weight" rating on ANZ due to concerns about customer mitigation risks in retail banking, lower-than-usual provisions coverage, and uncertainty surrounding a CEO transition expected later this year.
ANZ shares have gained 0.6% so far in 2025, reflecting modest investor confidence.
CBA: Market Leader with Limited Growth Prospects
For CBA, Morgan Stanley made a slight upward revision in its price target, increasing it from AU$127 to AU$128. Analysts recognised the bank’s dominant position in retail lending, a growing business banking division, and a strong balance sheet. However, they also pointed out that intense competition in key markets is limiting upside potential in return on equity.
Given these constraints and the absence of material growth opportunities, Morgan Stanley retained its "Underweight" rating on CBA. The bank’s stock has struggled in 2025, declining 6.8% year-to-date.
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