All eyes will be on Australia and New Zealand Banking Group Ltd (ASX: ANZ) shares this week when the banking giant releases its half-year results.
Ahead of the release on Wednesday, let's take a look at what the market is expecting.
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What is the market expecting from ANZ's first half results?
According to a note out of Goldman Sachs, its analysts are expecting the market to be focusing a lot on the bank's margins.
In light of this, investors may want to pay close attention to ANZ's net interest margin (NIM), which the broker expects to come in at 1.56%. This will be down 9 basis points versus the second half of FY 2021.
Goldman also suggests investors pay "attention to management expectation around its leverage to higher cash rates."
What about ANZ's profits and dividends?
The note reveals that Goldman expects ANZ to deliver a pre-provisioning operating profit of $4,270 million and cash earnings of $2,971 million for the half. This will be down 4.2% and 7.4%, respectively, from the second half of FY 2021.
Anything materially better (or worse) than these estimates could have a say in the direction ANZ shares take on Wednesday.
Finally, the broker has pencilled in a fully franked interim dividend of 72 cents per share for the period. This will be up 2.9% on the prior corresponding period and flat on ANZ's final dividend of FY 2021.
Are ANZ shares in the buy zone?
Goldman Sachs sees plenty of value in ANZ shares at the current level. The note reveals that its analysts have a buy rating and $32.74 price target on the bank's shares.
Based on the current ANZ share price of $27.32, this implies a potential return of 20% for investors over the next 12 months before dividends. This stretches to over 25% if you include them.
