Buy, hold, sell: Magellan, NAB, and Westpac shares

Are you on the hunt for some exposure to the financial sector for your portfolio? 

Well, the good news is that Morgans has been running the rule over a number of popular stocks from this side of the share market.

Here's what the broker is saying about them:

Magellan Financial Group Ltd (ASX: MFG)

Morgans is positive on this fund manager following the release of a market update at its annual general meeting.

Although the first quarter was subdued, it was pleased to see that the Magellan-Barrenjoey integration is running ahead of expectations.

In response, the broker has upgraded Magellan's shares to a buy rating with a trimmed price target of $8.66. It said:

MFG has hosted its AGM and given a market update. We read this as a softer market update overall. 1Q27 trading was subdued, with weakness in Financial Markets and Investment Management. Positively, Corporate Finance remains strong, and the MFG/Barrenjoey integration is running well ahead of schedule, with pre-tax synergies upgraded to A$15m p.a. (from A$6m). 

We reduce our FY27F/FY28F EPS by 5%-8% reflecting softer trading conditions in Financial Markets in 1Q27 and higher near term costs associated with the NZ business build out. Our PT falls to A$8.66 (previously A$10.25). Move to BUY rating, with >20% TSR upside.

National Australia Bank Ltd (ASX: NAB)

The broker isn't feeling as positive on NAB shares. 

Ahead of the release of the banking giant's results early next month, Morgans has trimmed its earnings estimates to reflect moderating balance sheet growth.

This has led to Morgans retaining its trim rating with a $35.67 price target. It commented:

We make c.2% downgrades to cash EPS forecasts ahead of the FY26 result, largely related to balance sheet growth (moderated). Minor increase to DCF-based target price, now $35.67/sh. TRIM retained, given potential TSR at current prices of c.-9%.

Westpac Banking Corp (ASX: WBC)

It is a similar story for Westpac shares, with Morgans believing that they are a touch overvalued at current levels.

The broker has also made minor changes to its estimates for Westpac's earnings due to softening balance sheet growth.

In light of this, the broker has retained its trim rating with a $31.67 price target. It explains:  

We make minor updates to FY26-27 forecasts ahead of the FY26 result, largely related to balance sheet growth (moderated). Target price unchanged at $31.67/sh. TRIM retained, given potential TSR at current prices of c.-9%.

The post Buy, hold, sell: Magellan, NAB, and Westpac shares appeared first on The Motley Fool Australia.

Motley Fool contributor James Mickleboro 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.

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