Down 34%: Is ANZ Banking Group a SELL?

Australia and New Zealand Banking Group (ASX:ANZ) is down, but is it out?

| More on:
a woman

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

The Australia and New Zealand Banking Group (ASX: ANZ) share price has fallen an enormous 34% since its peak in early 2015.

Source: Google Finance
Source: Google Finance

In fact, in 2016 alone shares of Australia's fourth largest bank have fallen 13%.

What's going on?

ANZ Banking Group has the largest exposure to Asia of any Australian retail bank. Former CEO Mike Smith's 'Super Regional' goal was to generate as much as 30% of revenue outside Australia and New Zealand.

So during 2015, when intense volatility engulfed Chinese share markets, ANZ Banking Group shares were hit harder than its domestic focused rivals like Commonwealth Bank of Australia (ASX: CBA) and Westpac Banking Corp (ASX: WBC).

At the time, each of the banks, including ANZ, were dealing with potential regulatory changes associated with how risks against mortgages were accounted for. They also conducted huge capital raisings needed to up their buffer against market crashes.

Moreover, in 2016, it is evident house prices have begun to cool off, competition from regional lenders is intensifying and small increases in bad debt charges have the market spooked.

Is ANZ Banking Group a SELL?

According to the 17 analysts surveyed by Reuters, the consensus recommendation is a 'Hold' on ANZ Banking Group shares. Only two have a sell rating.

Foolish takeaway

Investors should take analyst recommendations with a pinch of salt. Indeed, it's vital — especially if you're investing long-term — to do your own due diligence. That doesn't mean spending weeks researching the banking sector and running a 20-page Excel valuation model.

Just reading the broker's report or ANZ's annual report will provide you comfort in times of share price stress because you'll have a better understanding of the risks.

In my opinion, ANZ may not be a clear sell at today's prices, however, it may be wise to hold off buying any bank shares until the end of 2016.

Motley Fool Contributor Owen Raszkiewicz does not have a financial interest in any company mentioned. Owen welcomes -- and encourages -- your feedback on Google+, LinkedIn or you can follow him on Twitter @ASXinvest. The Motley Fool Australia has no position in any of the stocks mentioned. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

More on ⏸️ Investing

Close up of baby looking puzzled
Retail Shares

What has happened to the Baby Bunting (ASX:BBN) share price this year?

It's been a volatile year so far for the Aussie nursery retailer. We take a closer look

Read more »

woman holds sign saying 'we need change' at climate change protest
ETFs

3 ASX ETFs that invest in companies fighting climate change

If you want to shift some of your investments into more ethical companies, exchange-traded funds can offer a good option

Read more »

a jewellery store attendant stands at a cabinet displaying opulent necklaces and earrings featuring diamonds and precious stones.
⏸️ Investing

The Michael Hill (ASX: MHJ) share price poised for growth

Investors will be keeping an eye on the Michael Hill International Limited (ASX: MHJ) share price today. The keen interest…

Read more »

ASX shares buy unstoppable asx share price represented by man in superman cape pointing skyward
⏸️ Investing

The Atomos (ASX:AMS) share price is up 15% in a week

The Atomos (ASX: AMS) share price has surged 15% this week. Let's look at what's ahead as the company build…

Read more »

Two people in suits arm wrestle on a black and white chess board.
Retail Shares

How does the Temple & Webster (ASX:TPW) share price stack up against Nick Scali (ASX:NCK)?

How does the Temple & Webster (ASX: TPW) share price stack up against rival furniture retailer Nick Scali Limited (ASX:…

Read more »

A medical researcher works on a bichip, indicating share price movement in ASX tech companies
Healthcare Shares

The Aroa (ASX:ARX) share price has surged 60% since its IPO

The Aroa (ASX:ARX) share price has surged 60% since the Polynovo (ASX: PNV) competitor listed on the ASX in July.…

Read more »

asx investor daydreaming about US shares
⏸️ How to Invest

How to buy US shares from Australia right now

If you have been wondering how to buy US shares from Australia to gain exposure from the highly topical market,…

Read more »

⏸️ Investing

Why Fox (NASDAQ:FOX) might hurt News Corp (ASX:NWS) shareholders

News Corporation (ASX: NWS) might be facing some existential threats from its American cousins over the riots on 6 January

Read more »