CBA, ANZ, Westpac & NAB shares: 2020 dividend and analyst outlook
As the new year officially gets under way, we take a look at the current 12-month price targets and dividend outlook for Australia's big four banks.
As dominant Australian investment trends go, very few can match the market’s fervent passion for the big four banks and their hefty dividends.
With that in mind, below we take a brief look at the current broker outlook for the Commonwealth Bank of Australia (ASX: CBA), Australia and New Zealand Banking Group (ASX: ANZ), Westpac Banking Corporation (ASX: WBC) and the National Bank of Australia (ASX: NAB) – with a particular focus on expected capital returns, FY20 dividend yields and consensus ratings over the next 12-month period.
All estimates discussed in this piece are sourced from Bloomberg Data (BD).
ANZ share price: analysts say ‘HOLD’
The analyst outlook for ANZ remains conservative, with a HOLD rating on average. Looking at a more detailed breakdown of the analyst outlook, we see that the bank currently has three buy recommendations, ten hold recommendations and three sell recommendations.
Though this outlook is somewhat mixed, from a capital gains perspective, the current analyst 12-month share price target of $26.80 per share (on average) – does suggest some upside potential from current price levels.
ANZ currently trades at $24.95 per share.
In addition to capital gains potential, ANZ has an expected FY20 dividend yield of 6.30%.
CBA share price: brokers see downside, say ‘SELL’
Compared to ANZ, there’s little room for optimism in the broker outlook for CBA – which remains the biggest of the big four banks – with a market capitalisation of $141bn. On average CBA has a sell rating from Australia’s broker community, with just one buy recommendation, six hold recommendations and an overwhelming nine sell recommendations.
Looking at the 12-month share price target for the Commonwealth Bank – which currently stands at $75.03 per share – we see that on average analysts expect the stock to decline modestly into 2020. In saying that, CBA currently trades ahead of that target price, at $ 81.20 per share.
Finally, analysts expect CBA’s dividend yield to come in at 5.27% in FY20.
NAB share price: 46.7% of analysts say ‘BUY’
The National Bank of Australia – known as one of Australia’s most commercially-focused banks – looks to be the most liked by Australia’s analyst community, currently commanding a buy rating on average. Looking at these ratings in detail, we see that a significant seven analysts rate the bank a buy, five a hold and a mere three a sell.
Indeed, at current price levels and looking at NAB’s 12-month average share price target of $28.11 per share – analysts look to be expecting modest upside potential from the big four bank.
NAB’s expected dividend yield also remains strong, currently pegged at 6.57% for FY20.
Westpac share price: ten reasons to ‘HOLD’
The Westpac (ASX: WBC) share price has been battered by investors in recent times, after allegations from AUSTRAC emerged that the bank had breached Australia’s Anti-Money Laundering and Counter-Terrorism Financing Act on 23 million separate occasions.
APRA has more recently launched its own investigation its WBC’s conduct as it relates to the AUSTRAC allegations. APRA also increased Westpac’s capital requirements by $500m, 'to reflect the heightened operational risk profile of the bank.'
Those issues aside, looking at the average 12-month share price target for Westpac (ASX: WBC), we see that analysts expect some upside from current depressed price levels – with the bank expected to hit $26.02 per share over the 12-months. Westpac is currently rated a hold on average: with three buy ratings, ten hold ratings and three sell ratings, overall.
For FY20 analysts are expecting Westpac’s dividend yield to come in at 6.44%
This information has been prepared by IG, a trading name of IG Markets Limited. In addition to the disclaimer below, the material on this page does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. IG accepts no responsibility for any use that may be made of these comments and for any consequences that result. No representation or warranty is given as to the accuracy or completeness of this information. Consequently any person acting on it does so entirely at their own risk. Any research provided does not have regard to the specific investment objectives, financial situation and needs of any specific person who may receive it. It has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such is considered to be a marketing communication. Although we are not specifically constrained from dealing ahead of our recommendations we do not seek to take advantage of them before they are provided to our clients.
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