The ANZ Group Holdings Ltd (ASX: ANZ) share price is down 1% to $38.07 at the time of writing on Wednesday afternoon.
It's been a pretty volatile start to the year for the Australian banking giant.
ANZ shares were relatively flat between early-December and early-February, but they jumped over 11% off the back of the banking giant's stronger-than-expected quarterly update.
The bank reported a first-quarter cash profit of $1.94 billion, which was up a whopping 75% on the second-half average of FY25 and came in ahead of expectations.
After a couple of ups and downs the shares ended the month 9% higher before crashing over 10% throughout March. ANZ wasn't alone here though. ASX bank stocks slumped across the board as geopolitical tensions, ongoing conflict in the Middle East, soaring fuel prices, and interest rate growth caused concerns about an economic slowdown.
It wasn't long until the ANZ share price took another turn, climbing 5.9% in the first couple of weeks of April. Shares are also up 4.5% for the year to date and 37.8% higher than 12 months ago.
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Why is the ANZ share price being so volatile?
There are a few reasons.
April has been a good month for the banking sector as a whole. ASX bank shares have rallied after macro fears eased. These were driven by geopolitical tensions in the Middle East, oil shocks, and trade uncertainties.
Expectations that the US and Iran could soon reach a peace agreement to end the war is also helping to boost markets.
At the same time, economists are not predicting higher and sustained interest rate levels. ANZ economists anticipate that the Reserve Bank will hike interest rates in May.
Banks like ANZ benefit from interest rate increases over the short term because higher net interest markets help to support earnings levels.
Meanwhile, ANZ's stable earnings, predictable cash flow, and diversified portfolio mean that it looks better value versus its peers. It's likely some investors could have been rotating into the stock in the dip.
But why are the shares tumbling again this week?
There isn't any price-sensitive news out of ANZ to explain the latest share price tumble, so its likely to be the result of investors taking gains after a jump earlier this month, combined with some softening across the sector.
What do brokers expect out of the ANZ share price this year?
Brokers are undecided about the outlook for ANZ shares over the next 12 months. Out of 16 analysts, six have a buy or strong buy rating, and six have a hold rating. Another four have a sell or strong sell rating on the bank's shares.
The average target price of $36.43 implies a potential 4.2% downside at the time of writing. But the maximum target price is $43, which represents a potential 13% upside from here.
For context, brokers hold a sell or strong sell rating on all the other big four major Aussie banks.
