National Australia Bank (ASX: NAB) Stock: Latest News, Analyst Forecasts, and 2026 Outlook (20 December 2025)

National Australia Bank Limited (ASX: NAB) heads into the final stretch of 2025 with investors balancing three competing forces: a still-resilient banking earnings base, a shifting interest-rate narrative (again), and a market that’s become less forgiving of “expensive defensives.”

As of the latest close (Friday, 19 December), NAB shares were trading around A$42.14, up 0.84% on the day, with a 52‑week range of A$31.13 to A$45.25. NAB’s trailing dividend yield is sitting at roughly 4%, and the next scheduled earnings date widely tracked by markets is 17 February 2026. ^[1]

Below is a comprehensive, publication-ready roundup of what’s driving NAB stock as of 20 December 2025—including the most recent broker moves, macro forecasts, and the key fundamental signposts investors are using to frame NAB’s 2026 setup.

What’s new for NAB shares today

1) Broker move: Morgans sticks with “Sell” and lifts its target

In broker updates flagged in market coverage dated 20/12/2025, Morgans retained a Sell rating on NAB and increased its price target to A$32.56 from A$31.46. ^[2]

That target sits about 23% below the latest A$42.14 share price—an unusually large gap for a major bank, and a signal that at least some analysts see valuation risk dominating the narrative into 2026.

2) Goldman Sachs: initiated at “Sell” with below-consensus earnings expectations

Another attention-grabber in recent coverage: Goldman Sachs initiated NAB with a Sell rating, flagging pressure points in Personal Banking and projecting pre‑provision operating profit growth of ~1% per year from FY25–FY27, with cash earnings estimates 2–7% below consensus. ^[3]

Whether investors agree or not, this matters because “initiation calls” often shape the questions portfolio managers ask into the next results cycle: Is the stock priced for perfection? Where does incremental growth come from if margins soften?

3) NAB mortgage pricing: fixed rates rise as the rate outlook shifts

NAB has also been in the headlines indirectly via home-loan pricing. According to Canstar’s reporting, NAB lifted fixed home loan rates by up to 0.20 percentage points, taking its lowest fixed rate to 5.39% (changes effective from 16/12/2025). ^[4]

On NAB’s own published rate tables (for new loans), the bank notes rates were correct as at 16 December 2025 and are subject to change. ^[5]

For equity investors, fixed-rate moves are less about any single product and more about the signal: banks appear to be repricing for the possibility that the next material policy move isn’t a cut.

4) Capital markets funding: JPY 18 billion subordinated notes flagged

In mid‑December, NAB also disclosed it would issue JPY 18 billion fixed reset subordinated notes due December 2040 (as carried via a Reuters/Refinitiv feed). ^[6]

This is not an everyday “share-price catalyst,” but it’s part of the background music investors listen for: funding access, tenor extension, and the ongoing management of capital structure.

The macro backdrop: RBA on hold at 3.60%, but hike risk is back on the table

After three cuts earlier in the year, the Reserve Bank of Australia held the cash rate at 3.60% in December. NAB’s own customer notice page reflects that most recent decision plainly: the cash rate remains at 3.60%. ^[7]

But the tone has shifted.

Reuters reported that the RBA, after holding at 3.6%, warned the next move could be up if inflation pressures prove stubborn, with Governor Michele Bullock noting the board discussed circumstances under which rates might need to rise. ^[8]

That matters for banks in a very specific way:

Higher-for-longer or hiking risk can support asset yields (what banks earn on loans), but it can also raise funding and deposit costs and elevate credit risk.
Cuts can ease household stress (supporting asset quality), but often compress net interest margins (NIM) unless volume growth compensates.

And the inflation story is what’s putting “hikes” back in the conversation.

In Australia’s Mid‑Year Economic and Fiscal Outlook (MYEFO), Reuters reported Treasury lifted its inflation forecast to 3.75% for the year ending June 2026 (up from 3% previously). In the same report, Reuters noted that NAB and CBA were expecting the RBA to raise rates in February next year, with NAB also calling for a second hike in May. ^[9]

So, for NAB shareholders heading into 2026, “rate sensitivity” is not a theoretical debate—it’s the central variable.

NAB’s fundamentals: the FY25 scorecard investors are anchoring to

While today’s market focus is on rates and valuation, NAB’s most recent full-year numbers still set the baseline for what “normal” looks like.

Key FY25 numbers (year ended 30 September 2025)

In NAB’s FY25 full-year results summary:

Cash earnings:A$7,091m
Statutory net profit:A$6,759m
Final dividend:85 cents per share, 100% franked
Group CET1 ratio:11.70% ^[10]

On operating performance, NAB reported:

Revenue up 2.9% (with drivers including volume growth and Markets & Treasury income)
Gross loans and advances up 5.9%
Deposits up 7.4%
NIM up 3 bps to 1.74% ^[11]

On asset quality:

Credit impairment charge:A$833m (vs A$728m in FY24), with commentary that the pace of deterioration slowed in 2H25. ^[12]

On capital:

CET1 11.70%, down 65 bps year-on-year, with drivers including lending growth, investment spending, and buybacks; NAB also provided a pro forma CET1 of 11.81% reflecting the sale of its remaining stake in MLC Life. ^[13]

Reuters’ coverage of the FY25 result lined up with those headline numbers, noting cash profit of A$7.09b, a NIM of 1.74%, and a higher credit impairment charge driven by business lending. ^[14]

Dividend reality check: why NAB remains an “income stock”

From NAB’s results summary, the bank set the final FY25 dividend at 85 cps, bringing total dividends for the year to 170 cps, and described the FY25 cash earnings payout ratio as 73.3%, within its stated target band (65–75%, board-determined). ^[15]

With the stock around A$42, that trailing dividend profile maps to a yield around 4%—which is exactly why NAB often stays in the conversation when investors rotate toward income and away from high-duration growth.

Analyst forecasts: where targets and ratings sit heading into 2026

“Forecasts” for a bank like NAB typically cluster around three things:

12‑month price targets
Earnings trajectory (and margin direction)
Dividend sustainability

Consensus view: leaning negative on valuation

Investing.com’s compiled analyst snapshot shows:

Consensus rating: “Sell” (14 analysts)
Average 12‑month price target: ~A$38.07
High: A$46.31
Low: A$29 ^[16]

With the share price around A$42.14, the average target implies roughly ~10% downside—a notable signal that, in aggregate, analysts see NAB as priced above their central fair value estimate. ^[17]

The “FY26 headwinds” framework (and why it keeps coming up)

A useful lens comes from FactSet’s sector note on Australian banks. It argued that while FY25 momentum was solid, FY26 guidance was likely to highlight moderating revenue trends and renewed margin pressure as rate cuts filter through, and that expense control would be a major battleground. ^[18]

FactSet also flagged that NIMs were expected to be stable to slightly higher in FY25, but that resilience may not last, with renewed pressure in FY26 from lower cash rates and tighter spreads—while noting Westpac and NAB appeared best placed for positive NIM outcomes in 2H25. ^[19]

Even though the rate outlook has turned more hawkish again in December, the underlying point remains: bank margins are being tugged by multiple ropes at once—competition, deposit pricing, and funding markets.

Ratings commentary: strong asset quality, but earnings growth is harder

A Moody’s-linked view carried by Asian Banking & Finance summarizes the tension well: NAB is described as having strong asset quality and a strong funding profile, but with earnings growth challenged in 2026 due to competitive pressure on lending and deposits plus rising operating and investment costs. ^[20]

The same report cites a non‑performing loans ratio of 1.5% at September 2025 and suggests asset quality metrics could stabilize around current levels with lower interest rates and low unemployment. ^[21]

The 2026 bull case vs bear case for NAB stock

This is where the NAB story gets interesting: the same macro variable (rates) can support the bull case and power the bear case depending on how it lands.

A reasonable bull case for NAB shares

Income + resilience: A franked dividend stream remains attractive in an uncertain growth world, especially if volatility rises and investors “pay up” for stability.
Margin defense (if hikes materialize): A hawkish RBA stance—and the market repricing of rate expectations—could ease the fear that margins must mechanically compress in FY26. ^[22]
Asset quality holding up: NAB’s own FY25 commentary points to stabilizing mortgage arrears and a slowing pace of deterioration, even with higher impairment charges year-on-year. ^[23]
Capital buffer remains above target: CET1 at 11.70% is still above NAB’s stated target level (as described in the results summary context), giving flexibility even if growth consumes capital. ^[24]

A realistic bear case investors are also pricing

Valuation gravity: When a stock trades above consensus targets—and brokers maintain “Sell” calls—it can take very little bad news to cause a sharp de‑rating. ^[25]
Competition squeezes returns: Even if the macro backdrop cooperates, intense mortgage and business-lending competition can transfer economic value from shareholders to borrowers (via pricing).
Costs and remediation risk: FY26 is shaping up, sector-wide, as a year where investors scrutinize cost discipline and transformation execution. ^[26]
Credit losses can normalise: NAB’s FY25 impairment charge increased, and the debate for 2026 is whether “mean reversion” in bad debts arrives just as revenue growth cools. ^[27]

What to watch next: the catalysts that can move NAB stock

Here are the forward-looking triggers most likely to matter for NAB shares between now and the February reporting window:

RBA policy path (February focus): Treasury-linked commentary reported by Reuters suggests NAB expects a February hike—and even a possible May follow-up—so each inflation and labour-market print will feed directly into bank sentiment. ^[28]
Mortgage pricing and competition signals: NAB’s mid‑December fixed-rate increases are a concrete signpost that banks are adjusting to the evolving rate outlook. ^[29]
Funding and capital market conditions: The disclosed JPY 18b subordinated note issuance is one example of the kind of funding activity investors monitor for spreads, access, and confidence. ^[30]
Next earnings milestone (February): The market’s widely followed earnings calendar points to 17 February 2026 as the next earnings date for NAB. ^[31]

Bottom line for investors watching NAB on 20 December 2025

NAB stock is closing out 2025 in a familiar—but newly tense—position: operationally solid, dividend-supported, and heavily exposed to the “rates + competition + costs” triangle.

The latest news flow shows:

Broker skepticism still exists in size (Morgans’ Sell with a materially lower target). ^[32]
More bearish framing is entering the conversation (Goldman initiation at Sell with below-consensus earnings expectations). ^[33]
Macro uncertainty is rising again, with official forecasts lifting inflation expectations and the RBA explicitly flagging that the next move could be up. ^[34]
Bank pricing behaviour (like NAB’s fixed-rate hikes) suggests institutions are no longer positioning for a simple glide path to lower rates. ^[35]

In plain English: NAB in 2026 likely won’t be about dramatic surprises—it’ll be about whether the bank can defend returns (and keep dividends attractive) in a world where rates, margins, and customer competition refuse to sit still.