National Australia Bank Ltd (ASX: NAB) shares have had a difficult year.

Down approximately 10% year-to-date, NAB has materially underperformed the broader ASX 200 in 2026. The company has shed billions in market capitalisation even as the bank continued to pay consistent fully franked dividends to its shareholders.

This week, Fairmont Equities’ Michael Gable added his name to the growing list of analysts expressing concern about the outlook, issuing a sell alert on NAB shares with a frank assessment of the risks building into FY27.

The question for the millions of Australians who own NAB shares, directly or through their superannuation funds, is whether those concerns are already reflected in the price or whether there is more pain ahead.

What the analyst said

Gable’s sell case rests on three specific concerns about NAB’s positioning heading into FY27.

The first is margin pressure.

Higher deposit competition continues to eat into the spread between what NAB earns on its lending and what it pays to depositors.

This is a structural headwind for all four major banks, and one that hits NAB particularly hard given its business banking focus.

The second is credit risk.

NAB’s first-half FY26 result saw the bank increase its collective provisions by $300 million. This is a signal that management is preparing for potential deterioration in credit quality across its business lending book as higher interest rates and a weaker economy take their toll.

The third concern goes to NAB’s core competitive advantage.

NAB has long been regarded as the premier business bank in Australia, with deeper relationships and stronger market share in commercial lending than any of its peers.

Gable cautioned that this strength is what makes NAB most exposed in the current environment.

He said:

In a weaker economy, NAB is particularly vulnerable to softer earnings growth due to its higher focus on business banking.

Summarising his sell recommendation, he concluded:

Despite a significant share price fall, NAB valuations aren’t cheap, leaving the stock exposed to downside risk.

The numbers behind the concern

NAB’s first-half FY26 result, released on 4 May, told a story of a bank managing its way through difficult conditions rather than growing through them.

Cash earnings (excluding notable items) rose just 2.3% year-on-year to $3.59 billion, while underlying profit was up 6.4%.

The credit impairment charge of $706 million was partially tied to potential stress from the Middle East conflict.

The bank maintained its interim dividend at 85 cents per share, a sign of stability but also confirmation that earnings growth has slowed to a level that does not support a dividend increase.

The consensus analyst picture is bleak relative to NAB’s recent history.

Of the nine most recent rating calls, four are sell, three are hold, and two are buy. This is an unusually bearish spread for one of Australia’s largest companies.

The bull case for NAB shares still exists

Not every analyst shares Gable’s view.

UBS retains a buy rating on NAB shares with a price target of $48.50, implying upside of approximately 35% from current levels.

The broker cited NAB’s improving net interest margin and business banking position as reasons the selloff has overshot.

At approximately 15 times forecast FY26 earnings, NAB is also considerably cheaper than CBA, which trades at approximately 26 times.

The consensus forecast for the FY26 dividend is $1.70 per share, fully franked.

This implies a forward grossed-up yield of approximately 6.4% at current prices, which remains attractive on an absolute basis for income investors.

That yield, and the relative valuation discount to CBA, forms the core of the remaining bull argument.

The honest assessment for NAB shares

The headwinds Gable identifies are material.

Margin pressure, rising provisions, and business banking credit risk are real concerns, and were reflected in the bank’s own first-half result.

However, a 10% share price this year already prices in a meaningful amount of that negative expectation.

The gap between UBS’s $48.50 target and the current price suggests the market has, if anything, possibly overreacted.

But that conclusion depends on whether credit quality holds up and whether NAB’s business banking franchise continues to outperform its peers even in a weaker economy.

Foolish takeaway

NAB shares are not obviously cheap even after a 10% fall.

The headwinds the bank faces into FY27 are material. But a cheaper entry point, a fully franked yield approaching 6.5%, and a valuation discount to CBA all suggest the market has already priced in a significant portion of the bad news.

Investors who already hold NAB shares for income purposes have a defensible reason to stay patient.

Investors considering a new position should weigh the attractive yield against the credit quality uncertainty that FY27 will ultimately resolve.

The post A leading analyst is forecasting growing headwinds for NAB shares. Should investors be worried? appeared first on The Motley Fool Australia.

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Motley Fool contributor Mark Verhoeven 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.

ASX wine stock Treasury Wine Estates Ltd (ASX: TWE) looked as though it was finally turning a corner.

After gaining around 7% over the past month, investors were starting to believe the worst might be over. Instead, the ASX wine stock slipped another 3.2% to $4.50 on Thursday, extending its six-month decline to 14% and its 12-month loss to a hefty 43%.

So, what stopped the recovery in its tracks?

Patchy consumer demand

The $4 billion ASX wine stock has spent much of the past year battling headwinds on several fronts.

Investors have become increasingly concerned about patchy consumer demand, a slower-than-expected recovery in China, and weaker discretionary spending as households continue to feel the pressure from higher living costs.

Premium wines like Treasury Wine’s brand Penfolds may command attractive margins, but they are hardly immune when consumers tighten their belts.

Thursday’s decline also appeared to reflect a degree of profit-taking after the recent rally rather than any material negative announcement.

Reasons for optimism remain

In fact, management delivered a reasonably encouraging update at its recent investor day. Treasury Wine reaffirmed FY26 EBIT guidance of $480 million to $490 million and indicated FY27 earnings should be at least comparable as Penfolds completes its inventory rebalancing in China.

Management also highlighted the TWE Ascent transformation program, which is targeting $100 million in annual cost savings. The first benefits are expected to flow through in FY27, with the full financial impact building over the following two to three years.

Investors initially welcomed those updates, sending the ASX wine stock almost 10% higher immediately after the investor day.

Why the long-term story remains intact

Treasury Wine still owns one of the strongest portfolios of premium wine brands in the industry. Its stable includes Penfolds, 19 Crimes, Wolf Blass, Lindeman’s, and Squealing Pig, giving the company exposure to both luxury and mainstream consumers across multiple global markets.

Management of the ASX wine stock continues to shift the business towards higher-margin premium wines, reducing its reliance on lower-priced, more competitive products.

China could also become a meaningful growth driver again. The removal of tariffs on Australian wine has reopened an important export market. While the recovery has been slower than many investors hoped, stronger demand would provide a significant earnings tailwind.

Combined with Treasury Wine’s broad international distribution network, the company is less dependent on any single market than many of its peers.

Risks remain

The investment case of this ASX wine stock is not without challenges. Consumer demand remains uneven, competition is intense, and the recovery in China still needs to prove itself.

If spending on premium wines remains subdued or Chinese sales disappoint, earnings growth could again fall short of expectations.

What do analysts think?

Despite recent weakness, brokers remain constructive. Citi continues to rate Treasury Wine a buy with a $5.50 price target, implying upside of around 22% from current levels.

Morgans is even more optimistic on the ASX wine stock. Following the company’s investor day, the broker reiterated its buy recommendation and lifted its target price to $5.95 per share. That suggests Treasury Wine shares could climb roughly 32% over the next 12 months.

For now, investors appear torn between encouraging long-term fundamentals and near-term uncertainty. The next few earnings update next month may determine which story ultimately wins.

The post This ASX wine stock looked ready to recover. Why did it stumble again? appeared first on The Motley Fool Australia.

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Motley Fool contributor Marc Van Dinther 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 Treasury Wine Estates. The Motley Fool Australia has positions in and has recommended Treasury Wine Estates. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

Commonwealth Bank of Australia (ASX: CBA) shares remain one of the most widely held investments on the ASX.

The bank last traded around $161.14, which places it around the middle of its 52-week range of $146.98 to $185.59. That means investors are currently looking at a share price that is below recent highs, but still far from distressed levels.

So the question is simple: should investors buy, hold, or sell CBA shares in July?

My view is that CBA is a buy.

Why I still like CBA

CBA continues to stand out as the highest-quality bank in Australia, in my view.

It has a dominant retail franchise, a very large and stable deposit base, and a strong digital banking platform that supports customer retention and efficiency. These are not new advantages, but they are the kind that tend to compound over long periods.

Banking is a competitive industry, but scale and trust still matter. I think CBA has both in abundance.

Even in a more uncertain economic environment, customers still need mortgages, transaction accounts, savings products, credit cards, and business banking services. CBA sits at the centre of that system.

Earnings and valuation

According to CommSec consensus estimates, CBA is expected to generate earnings per share of $6.54 in FY26 and $6.72 in FY27.

Based on the current share price of $161.14, that puts the bank on a price-to-earnings ratio of around 25 times FY26 earnings and 24 times FY27 earnings.

That is not a cheap valuation. However, I think it is important to separate valuation from quality. CBA consistently trades at a premium because investors are willing to pay for stability, profitability, and lower risk compared to other banks.

In that context, I think the valuation is justified rather than extreme.

Income appeal

CBA also remains attractive for income-focused investors.

While its dividend yield is not the highest in the banking sector, CBA’s dividends are typically supported by strong earnings and a conservative approach to capital management.

That combination of income and safety is a key reason many investors continue to hold the stock even after strong share price performance in recent years.

Key risks

No investment is without risk, and CBA is no exception.

The biggest risks remain around housing market conditions, credit quality, regulatory pressure, and the broader economic cycle. If unemployment were to rise significantly or property prices were to weaken materially, bank earnings would likely come under pressure.

There is also the risk that investors are already paying a premium for quality, which could limit near-term capital upside.

Foolish takeaway

I think CBA shares are a buy in July.

The valuation is not cheap, but I think it is fair for the quality of the business. CBA remains the dominant banking franchise in Australia, with strong earnings power, a reliable deposit base, and a long track record of navigating different economic cycles.

For long-term investors, I think it remains one of the most dependable ASX shares to own.

The post Should I buy, hold, or sell CBA shares in July? appeared first on The Motley Fool Australia.

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Motley Fool contributor Grace Alvino has positions in Commonwealth Bank Of Australia. 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.