Are ASX 200 bank stocks a buy in October?

Find out what analysts are forecasting for bank shares over the next 12 months.

September was a mixed month for S&P/ASX 200 Index (ASX: XJO) bank shares.

Some ASX bank stocks experienced a pullback over the past month, while others started trending higher. 

It looks like investors aren't sure what to make of rising inflation, higher interest rates, a weakening housing market, all against a backdrop of macroeconomic pressures and broad-based uncertainty.

Four business people wearing formal business suits and ties walk abreast on a wide paved surface with their long shadows falling on the ground ahead of them.

Image source: Getty Images

What happened to the ASX 200 big four major banks in September?

Australia's banking sector is dominated by the 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, they make up around a quarter of the ASX 200 by market capitalisation. 

There wasn't any price sensitive news out of any of the big four banks in September, so share price fluctuations were due to shifts in investor sentiment.

At the close of the last day of the month, CBA shares were around 0.5% higher to $151.01 each. But the ASX 200 major bank's shares have dropped around 6% over the course of September. 

NAB shares also ended the month in the green, up slightly by around 0.1% for the day on Wednesday, at $39.15 a piece. NAB shares have been relatively stable over the past month, and ended around 1% higher than they started. 

ANZ shares, however, ended the last day of the month in the red. The shares fell around 0.5% to $38.31 on Wednesday afternoon. But over the past month, the bank stock has climbed around 3% higher.

Meanwhile, Westpac shares ended around 0.2% higher on Wednesday afternoon, at $35.07 each. Over the past month, the shares have risen around 1.5%.

What about the ASX 200 mid-tier banks?

It was a similar story among the ASX 200 mid-tier banks, too.

Bendigo and Adelaide Bank Ltd (ASX: BEN) closed around 0.5% higher on the last day of September, at $10.36 each. Over the month, the shares fell around 3%.

Bank of Queensland Ltd (ASX: BOQ) shares climbed slightly into the green, up around 0.2% to $6.61. They were also up around 1% over the course of September. 

While Macquarie Group Ltd (ASX: MQG) also tumbled around 0.5% on Wednesday, closing the month at $246.10 a piece. The bank shares were also down around 2% over the month.

Which ASX bank shares are a buy for October?

Macquarie shares were one of the poorest performing ASX bank shares in September. But it's still the only stock that brokers are bullish about going forward. Market Index data shows that the majority have a strong buy rating on Macquarie shares. The average $270.89 target price implies the shares have the potential to climb another 10% higher, at the time of writing.

Which ones have been rated as a sell?

The experts have had a strong sell rating on CBA shares for some time now. And there hasn't been a change in sentiment this month either. Market Index data shows the majority of brokers have a strong sell rating, and the $125.20 target price implies a downside of around 17%, at the time of writing. That's the largest forecasted downside of any of the ASX banks.

The experts also have a sell rating on Westpac shares. Market Index data shows the average $34.18 target price implies a downside of around 3%, at the time of writing.

Brokers are also bearish on the outlook for Bendigo and Adelaide Bank shares. Market Index data shows the majority have a sell rating, and the $10.06 average target price also implies a downside of around 3%.

And what shares do brokers rate as a hold?

The data also shows that the majority have a hold rating on NAB shares. The $39.88 average target price implies the shares have the potential to climb slightly, by around 2%, over the next 12 months.

It's a similar story for ANZ shares. Most brokers also have a hold stance on the major bank. But after a slightly stronger September, the $36.05 average target price now suggests the shares could fall by up to 6% over the next 12 months, at the time of writing.

BOQ shares are the last on the list. Again, the majority have a hold rating, and the $6.06 average target price implies a downside of around 8%, at the time of writing.

Motley Fool contributor Samantha Menzies has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has positions in and has recommended Macquarie Group. The Motley Fool Australia has positions in and has recommended Bendigo And Adelaide Bank. The Motley Fool Australia has recommended Macquarie Group. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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