Morgan Stanley (NYSE:MS) has downgraded NATIONAL AUSTRALIA BANK LIMITED (ASX:NAB) to equal-weight from overweight following the lender’s flat annual cash profit of $7.09 billion.
Analyst Richard Wiles told clients that NAB’s total shareholder return has fallen about 30% since the end of March, prompting the rating change. While he sees solid operating trends and progress on NAB’s three core priorities, Wiles argues the bank’s earnings outlook and capital position are not strong enough to support near-term share price upside.
Wiles also noted the risk of a dividend cut in FY26 is low, but said NAB’s capital position limits its ability to accelerate growth in business and institutional banking. He expects positive jaws in FY26, driven by a mix of robust volume growth and a more stable margin profile.
NAB shares were up 2% at $44.08, recovering part of Thursday’s 3.3% decline.