ASX bank stocks slumped across the board in March, and then some shares quickly rebounded in April as ongoing geopolitical tensions, the Middle East conflict, and climbing inflation jittered markets.
Investors initially turned away from financial stocks in fear of an unstable macro environment. Then, more recently, it seems like investors have rotated back into bank stocks as macro fears have started easing again.
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How are Australia's major banks faring today?
The banking sector is dominated by Australia's big four banks: Commonwealth Bank of Australia (ASX: CBA), Westpac Banking Corp (ASX: WBC), National Australia Bank Ltd (ASX: NAB), and ANZ Group Holdings Ltd (ASX: ANZ). Together, the big four banks make up around a quarter of the S&P/ASX 200 Index (ASX: XJO) by market capitalisation.
CBA shares have climbed 3.2% higher over the past month, and are up 12.4% for the year to date. At the time of writing, the bank's shares are changing hands at $181.21.
Westpac shares, however, have fallen 2.32% over the past month but are up 2.4% year to date. At the time of writing, Westpac shares are changing hands for $39.90 a piece.
NAB shares also dropped over the past month by 7.3%, but they're up 2.8% year to date. At the time of writing, the shares are changing hands at $43.64.
ANZ shares are up 1.5% over the past month and up 4.5% over the year to date. At the time of writing, the shares are changing hands at $38.04.
Which banks do analysts rate as a sell?
Analyst sentiment appears to be pretty bearish on most of the major ASX bank stocks.
TradingView data shows that CBA, Westpac, and NAB shares are all rated a sell or a strong sell by brokers, with significant downside risks over the next 12 months.
CBA shares are tipped to crash up to 50.5% to $90 per share, at the time of writing.
Westpac shares are tipped to tumble up to 26.6% to $29.32 per share.
NAB shares are also tipped to drop up to 32% to just $30 per share over the next 12 months.
And there is one major bank which analysts rate as a buy
The data shows that ANZ is the favourite among the bunch. Out of 16 analysts, six have a buy or strong buy rating on ANZ shares, and another six have a hold rating.
The average target price of $26.38 implies a potential 4.5% downside at the time of writing. But some are optimistic that the shares could climb 13% higher from here to $43 each.
Why is ANZ the standout?
ANZ's strong earnings momentum, predictable cash flow, and diversified portfolio mean that it looks like better value versus its peers. It also has a higher dividend yield than the other major banks, suggesting better upside potential.
I expect more investors to rotate into ANZ shares over the next few months.
