The National Australia Bank Ltd (ASX: NAB) share price is pushing higher on Wednesday.
In afternoon trade, the banking giant’s shares are up over 0.5% to $27.80.
Today’s gain means the NAB share price is up almost 15% over the last 12 months.
Where next for the NAB share price?
The good news for shareholders is that one leading broker believes the NAB share price can still climb meaningfully higher from here.
According to a note out of Goldman Sachs this morning, the broker has retained its conviction buy rating and $31.15 price target on its shares.
Based on the current NAB share price, this implies potential upside of 12% over the next 12 months for investors before dividends.
And if you include the $1.43 per share fully franked dividend the broker is forecasting in FY 2022, which represents a 5.1% yield, the total potential return stretches to over 17%.
What did the broker say?
Goldman named three reasons why it is bullish on the NAB share price. These include its cost management initiatives, its position as the largest business bank, and its balance sheet momentum.
The broker explained: “NAB remains our preferred major bank exposure, reflecting NAB’s cost management initiatives, which seem further progressed relative to peers, have freed up investment spend to be more directed towards customer experience (50% in FY22 from 39% in FY21) as opposed to infrastructure. Given NAB’s position as the largest business bank, we believe it will benefit more from the continued economic recovery (management is seeing all segments in its Business & Private Bank exhibiting solid growth without sacrificing margin, and asset quality remains pristine). Good balance sheet momentum with NAB expecting at or above system growth across all divisions.”
The post 3 reasons Goldman Sachs thinks NAB (ASX:NAB) shares are a conviction buy appeared first on The Motley Fool Australia.
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More reading
- How are ASX bank shares responding to the RBA’s interest rate call?
- ASX 200 shares offer 12% upside after sell-off: JP Morgan
- How does the Macquarie (ASX:MQG) dividend compare to the big four banks?
- Here’s what higher interest rates could mean for ASX bank shares
- What to expect from the NAB (ASX:NAB) Q1 update next month
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 Bruce Jackson.
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