National Australia Bank Ltd (ASX: NAB) shares are plummeting on Thursday. In fact, the big four bank’s stock is trailing the entire S&P/ASX 200 Index (ASX: XJO) right now.

It follows the release of the bank’s first-half earnings, wherein it revealed a record profit. Though, its performance didn’t live up to expectations.

The NAB share price is currently down 7.6% at $26.38.

Now, one top broker reportedly expects consensus forecasts on NAB’s earnings per share (EPS) to be revised downwards.

NAB shares trail ASX 200 on earnings release

NAB shares are suffering on the release of the bank’s earnings for the six months ended 31 March. As my Fool colleague James reported earlier, its results disappointed Goldman Sachs.

Now, UBS has weighed in, saying the bank posted a “weaker than expected” net interest margin (NIM) for the period, as per The Australian.

NAB’s NIM climbed to 1.77% last half – helped by a barrage of interest rate hikes put forward by the Reserve Bank of Australia (RBA). However, an increase in home lending competition and higher funding costs offset some of the benefits.

Meanwhile, its statutory net profit rose to around $4 billion and its dividend was upped to 83 cents per share.

The publication quoted UBS analyst John Storey as saying:

The standout for us was NIM only rising 10 basis points versus the previous half year with NAB calling out peaking NIM in Dec22 of 1.79%, with a [second quarter] exit NIM of 1.76%.

This result in our view confirms consensus is likely to revise EPS down further.

But it wasn’t all bad news. NAB noted consumption and growth in the Australian economy are starting to soften, with inflation also appearing to moderate – meaning interest rates are likely at or around their peak.

It also stated that it looks more and more likely that Australia could dodge a “pronounced economic correction”.  

The NAB share price is now 10% lower than it started the year. It has also fallen 18% since this time last year. Comparatively, the ASX 200 has risen 3% year to date and has fallen 2% over the last 12 months.

The post NAB shares dive 8% as EPS downgrades expected appeared first on The Motley Fool Australia.

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More reading

• NAB share price on watch after half-year earnings fall short of expectations
• 4 reasons to buy ASX 200 banks stocks right now
• 3 ASX 200 bank shares to go ‘long and bullish’ on right now
• 5 things to watch on the ASX 200 on Thursday
• Buy NAB and this ASX dividend share: analysts

Motley Fool contributor Brooke Cooper 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 Goldman Sachs Group. 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.

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