The weekly wrap: ANZ stands out from Macquarie crowd

This week (ended Thursday) featured a level of doubt creeping into the economic "green shoot" story, following on from last week's sharp turnaround in commodity prices. Banks were looking like traditional safe havens last week but this week saw underperformance as the average major bank share price dropped 1.9 per cent compared to a 0.9 per cent fall in the ASX 200. The falls were very even for a change, with ANZ, Westpac and National all falling around two per cent and Commonwealth one per cent.

CBA remains the only bank still trading at a noticeable (4.4 per cent) premium to the average broker target price, while ANZ is only just at a premium and Westpac and NAB are trading at about a two per cent discount. NAB nevertheless saw its average target jump by one per cent over the week as analysts adjusted following the Aviva announcement. NAB's planned acquisition of Aviva's operations in Australia may have dominated the banking headlines this week, and more on that in a moment, but for FNArena the significant news of the week is that Macquarie Equities has turned.

Macquarie has been, for the best part of 2009 at least, the stand out bank bull in the FNArena broker universe. For a long time the broker has been alone amongst its peers in rating all four big banks as Outperform. While the likes of RBS has been dooming and glooming on the other end of the scale about rising bad debts and various other bank nasties, Macquarie has remained as a stoic standard bearer, shrugging off major bad debt concerns and more recently "looking through" to the other side of the weak economic cycle.

It is not that Macquarie has now changed its mind. It's just that the analysts now believe everyone has finally come around to their way of thinking. Indeed, a little too much.

It is true that other brokers have recently highlighted "look through" assessments ,and clearly true that the big four have enjoyed the fruits of the "green shoots" rally since early March. Macquarie had already downgraded NAB to Neutral, suggesting its UK and CDO exposures meant the stock was valued about right, but now the analysts have decided the market has already overpriced Westpac and CBA on a "look through" basis and so both have been relegated straight from Outperform to Underperform (or Buy to Sell as FNArena equates it for correlation purposes).

ANZ remains as the last Outperform, with Macquarie believing in upside from its Asian expansion plans. The move has played havoc with the total Buy to Sell ratio for the Big Four among all the FNArena brokers, dropping it from 7/8 to 5/10 - as low as the ratio has been since the rally began.