National Australia Bank Ltd (ASX: NAB) shares have tumbled again in Thursday afternoon trade.
At the time of writing, the banking giant's shares are down 1.55% to $36.29 a piece.
Today's slide means the shares have shed over 26% of their value since peaking at an all-time high of $49.10 in late February.
Over the past month alone, the shares have fallen 19%. For the year to date, they're down 14%, but they're still marginally higher (0.6%) than this time last year.
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Why are NAB shares tumbling?
In February, NAB reported stronger-than-expected profits in its first quarter FY26 earnings results. The banking giant revealed a 15% hike in its cash earnings and a 6% increase in revenue. Investors were clearly pleased with the result.
The bank's latest half-year FY26 results were a different story. Despite posting a modest earnings growth earlier this month, including a 6.4% increase in underlying profit and a 3.1% increase in revenue, the share price sell-off accelerated. Despite the solid result, it was a miss compared to expectations, and investors reacted negatively.
It isn't just company-specific headwinds affecting the bank's shares either.
Broad bank-sector pressure and concerns about global volatility, higher interest rates, and a slowdown in lending have taken their toll on the Australian banking sector.
Further fears about rising climbing loan arrears, housing-market policy changes, and slower economic growth have also dampened ASX bank shares across the board.
There isn't any price-sensitive news out of the banking giant this week to explain the latest sell-off, so it's most likely a continued decline in sentiment off the back of the bank's results announcement last week.
Are the shares a buy, sell, or a hold?
Sentiment around the ASX bank sector has been depressed this year, and analyst sentiment has been pretty bearish on most of the major bank stocks.
But it looks like the attitude towards NAB shares could finally be shifting, and some analysts are beginning to upgrade their ratings on the banking giant's shares.
TradingView data shows that eight out of 16 analysts have a hold rating on NAB shares. Another six have a sell or strong sell rating, and rate the shares as a strong buy. This is an improvement from just two weeks ago, when the majority had a sell or strong sell rating.
At the time of writing, the $38.40 average 12-month target price implies a potential 6% upside. Meanwhile, the maximum $48.50 target price suggests that NAB shares could climb 34% over the next year.
UBS renewed its buy rating on NAB shares with a $48.50 target this week.
Last week, Morgans also upgraded NAB shares from a sell to a trim rating and lifted its target price by 4% to $26.10. The team said the bank's first-half FY26 earnings "were a mixed bag and a touch below expectations".
