Sell alert! Why this expert is calling time on Bendigo Bank shares

Bendigo and Adelaide Bank Ltd (ASX: BEN) shares took a beating on Wednesday.

Shares in the S&P/ASX 200 Index (ASX: XJO) bank stock closed down 4.16% yesterday, trading for $10.61 apiece.

For some context, the ASX 200 ended the day down 1.18%.

Taking a step back, Bendigo Bank shares are now trading at just about the same levels they were one year ago, underperforming the 13.14% 12-month gains posted by the benchmark index.

Although that’s not including the 63 cents a share in fully-franked dividends the bank paid eligible stockholders over this time. Bendigo Bank stock trades on a fully franked trailing dividend yield of 6%.

But that passive income isn’t enough to keep Bell Potter Securities’ Christopher Watt from issuing a sell recommendation on the ASX 200 bank stock (courtesy of The Bull).

Should you sell Bendigo Bank shares today?

“The market responded positively to the company’s third quarter trading update for fiscal year 2026,” Watt said.

Indeed, Bendigo Bank shares closed up 8.4% on 9 April following the release of the bank’s Q3 FY 2026 update.

“Unaudited cash earnings were up 7.6% on the first half quarterly average. The net interest margin of 1.98% was up 6 basis points on the second quarter of 2026,” Watt noted.

As for the sell recommendation, Watt concluded:

In our view, catalysts to drive improvement from here are limited. The risk-reward profile lags other peers, so we would be inclined to cash in gains in this volatile environment.

What’s been happening with the ASX 200 bank stock?

Despite the 7.6% third-quarter cash earnings boost Watt mentioned above, Bendigo Bank reported a 0.4% year-on-year decline in statutory net profit after tax (NPAT) to $109.4 million.

Profits were impacted in part by the 3.2% year-on-year increase in operating expenses to $305.1 million.

The March quarter also saw the company launch the next phase of its Productivity Program.

The program, which is intended to support Bendigo Bank shares longer term, includes recently announced partnerships with Infosys and Genpact.

Commenting on the new partnerships on the day, Bendigo Bank CEO Richard Fennell said:

These partnerships will support the Bank’s ability to meet the rapidly evolving needs of our customers and other stakeholders as we build on the foundational technology platforms already delivered.

By focusing on our core strengths, including customer connection and our strong deposit franchise, Bendigo Bank will be better positioned to respond to changing market dynamics and drive sustainable growth.

The post Sell alert! Why this expert is calling time on Bendigo Bank shares appeared first on The Motley Fool Australia.

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Motley Fool contributor Bernd Struben has no position in any of the stocks mentioned. 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 positions in and has recommended Bendigo And Adelaide Bank. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.