Morgan Stanley highlights ANZ Bank announced a "softer" than expected 1H25 earnings report.

Revenue missed consensus forecasts and, excluding the impact of Suncorp Bank, fell -1% on the previous half and down -2% on a year earlier, the analyst details.

Cost management was viewed as positive and has resulted in a reduction in the bank's growth profile. Morgan Stanley remains cautious on the outlook for retail banking, corporate finance, and markets in A&NZ.

Management has decided to take on a more conservative capital setting, including issuing new shares for the DRP, which offers increased flexibility for balancing the remaining share buybacks.

Unchanged Equal-weight rating. Target price slips to $27.50 from $29.30. Industry View: In-Line.

Sector: Banks.

Target price is $27.50.Current Price is $29.40. Difference: ($1.90) - (brackets indicate current price is over target). If ANZ meets the Morgan Stanley target it will return approximately -7% (excluding dividends, fees and charges - negative figures indicate an expected loss).

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