ASX expert: Time to sell NAB shares

The calls that NAB shares are overvalued are growing louder…

| More on:
A man in his 30s with a clipped beard sits at his laptop on a desk with one finger to the side of his face and his chin resting on his thumb as he looks concerned while staring at his computer screen.

Image source: Getty Images

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

Like most ASX 200 bank stocks, National Australia Bank Ltd (ASX: NAB) shares have been a very pleasing investment to have owned in recent months.

Despite being down a hefty 1.5% today to $33.42 a share, NAB stock remains up a happy 8.3% over 2024 to date. The bank also remains up an even better 16.57% over the past 12 months. Combining these share price returns with NAB's healthy trailing dividend yield of 5% (which comes fully franked of course), and we are staring at some fairly lucrative returns for NAB shareholders.

Bear in mind that NAB shares are also down around 5% from their most recent 52-week high. Back in early March, NAB hit $35.12 a share, so these returns looked even better back then. And investors who were lucky enough to pick up NAB shares back in June last year at the bank's last 52-week low of just over $25 a share would be looking at a return of over 32% right now.

These returns are similar to what investors in the other big four banks like Westpac Banking Corp (ASX: WBC) and Commonwealth Bank of Australia (ASX: CBA) have enjoyed over these periods.

So we've established that NAB has been a great stock to have owned in recent months. But that doesn't necessarily mean that this ASX 200 bank will continue to be a great investment going forward.

In fact, one ASX expert is warning investors that it won't be.

ASX expert: Sell NAB shares now

As reported by The Bull, Harrison Massey of investment house Argonaut has named NAB as a sell. Massey cites valuation concerns for his bearish view. Here's what he told investors in full:

The bank has enjoyed a strong start in calendar year 2024, with the share price rising from $30.86 on January 2 to trade at $34.30 on April 11. In our view, the stock was recently trading on peak multiples. Also, in our opinion, there appears to be a lack of catalysts to move the share price higher in the short term. It may be worth considering taking some profits at these levels.

Massey isn't the only ASX expert warning investors of ASX 200 banks like NAB right now either. Last month, we covered the bearish views of Wilsons equity strategist Rob Crookston.

Crookston stated that "valuation multiples have risen significantly, and are now stretched relative to historical norms" for all four of the major ASX banks. He concluded by calling current bank share prices "excessive".

So not a great review of NAB shares at their current valuation by these two ASX experts. Let's see if their pessimistic outlook is vindicated by the share market over the coming 12 months and beyond.

At the current NAB share price, this ASX 200 bank has a trailing dividend yield of 5.01%.

Motley Fool contributor Sebastian Bowen has positions in National Australia Bank. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

More on Bank Shares

Woman with $50 notes in her hand thinking, symbolising dividends.
Bank Shares

If I buy 1,000 CBA shares, how much passive income will I receive?

CBA's dividends might not be as lucrative as you'd think...

Read more »

Focused man entrepreneur with glasses working, looking at laptop screen thinking about something intently while sitting in the office.
Bank Shares

Are Westpac shares good value or expensive?

This banking giant's shares have been strong performers this year. Is it too late to invest?

Read more »

Man pointing at a blue rising share price graph.
Bank Shares

Guess which ASX 200 bank stock just hit a 4-year high?

The bank’s profitability prospects are increasing.

Read more »

excited investor making fist at computer screen
Bank Shares

Would I be crazy to buy CBA shares at $121?

The CBA share price is close to an all-time high.

Read more »

Woman calculating dividends on calculator and working on a laptop.
Dividend Investing

What's the dividend yield of NAB shares right now?

What’s the size of NAB’s payout?

Read more »

A woman standing on the street looks through binoculars.
Bank Shares

Here is the earnings forecast through to 2026 for ANZ shares

Dividend investors will be keen to see what's on the horizon for ANZ.

Read more »

Happy man working on his laptop.
Bank Shares

ASX 200 bank stock smashing the benchmark on Friday as a key metric strengthens

Investors are sending the ASX 200 bank stock surging on Friday. But why?

Read more »

A woman in a bright yellow jumper looks happily at her yellow piggy bank representing bank dividends and in particular the CBA dividend
52-Week Highs

Why is the CBA share price setting a new all-time high today?

Australia's biggest bank just became more expensive. What is driving the demand?

Read more »