Westpac Banking Corp (ASX: WBC) shares are sliding today.
Shares in the S&P/ASX 200 Index (ASX: XJO) bank stock closed yesterday trading for $35.41. As we eye the Thursday lunch hour, shares are changing hands for $34.94 apiece, down 1.3%.
National Australia Bank Ltd (ASX: NAB) shares are taking a hit as well. The NAB share price closed yesterday at $36.33. At the time of writing, shares are trading for $35.93 each, down 1.1%.
For some context, the ASX 200 is down 0.3% at this same time amid a broader global stock market retreat following renewed military strikes in the Middle East.
Unfortunately, today’s underperformance for these big four banks has been par for the course in 2026, with both ASX 200 bank stocks materially trailing the 1.2% year-to-date losses posted by the benchmark index.
Indeed, Westpac shares have slumped 10.3% this calendar year. Losses that will only be marginally eased by the fully-franked 77 cent per share dividend the bank will pay eligible stockholders on 26 June.
Westpac stock traded ex-dividend on 8 May, so investors selling today, who held the stock at market close on 7 May, will receive that passive income payout.
NAB shares have had an even tougher run this year, down 15.2% since 2 January.
NAB will pay out its 85-cent per share fully-franked interim dividend on 2 July. NAB shares traded ex-dividend on 7 May, so that payout will go to investors who held the stock at market close on 6 May.
And looking ahead, MPC Markets’ Mark Gardner forecasts that both ASX 200 bank stocks are likely to face more headwinds over the coming months (courtesy of The Bull).
Here’s why.
Time to exit Westpac shares?
“Westpac has a strong retail franchise, but the valuation appears stretched,” Gardner said. “Consensus targets imply downside from current levels.”
Summarising his sell recommendation on Westpac shares, he concluded:
The bank has made progress on simplifying its operations and cutting costs, but, in our view, earnings growth is still expected to lag the broader Australian market. The bank is up against competitive pressures and the risk of softer credit conditions. Investors may want to consider taking a profit at these levels.
Should I sell NAB shares today?
Alongside his bearish outlook for Westpac shares, Gardner also issued a sell recommendation for NAB shares.
“NAB remains a quality banking franchise, but the near-term earnings outlook is under pressure,” he said.
Gardner noted the attractive passive income on offer from NAB shares, but pointed to some concerning issues from its H1 FY 2026 results.
According to Gardner:
The bank’s first half net profit in fiscal year 2026 missed analyst expectations, with bad debt provisions and one-off charges weighing on the result. The dividend remains attractive, but valuation support looks less convincing if earnings momentum continues to soften.
Explaining his sell recommendation for NAB shares, he concluded:
In our view, the bank faces the challenges of margin pressure, higher credit risk and slower profit growth. We prefer to reduce exposure and direct capital towards stronger growth opportunities elsewhere.
The post Sell alert! Why this expert is calling time on NAB and Westpac 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 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.