The consensus analyst price target for NatWest Group has been modestly raised to £5.99, reflecting improved earnings momentum, robust capital returns, effective cost control, and a more constructive macroeconomic outlook.
Analyst Commentary
- Bullish analysts cite strong underlying earnings momentum and resilient net interest margin performance as key drivers for target upgrades.
- Improved capital return outlook, including robust dividend prospects and continued share buybacks, is supporting higher valuations.
- Positive expectations around cost control measures and efficiency improvements are anticipated to drive further profitability.
- Analysts note a more constructive macroeconomic backdrop, reducing credit risk concerns and boosting the sector's attractiveness.
- Increased confidence in management's strategic execution, with NatWest's progress on digital transformation and market positioning, underpins the optimistic price revisions.
What's in the News
- NatWest Group plans to divest its 85% stake in Cushon, a workplace pension and savings app, after acquiring majority ownership two years ago.
- The company announced intentions to exit its entire shareholding in Permanent TSB Group Holdings via an institutional placing, amounting to approximately 11.7% of PTSB's issued capital.
- NatWest Group is among parties being approached regarding a potential acquisition of wealth manager Evelyn Partners, which is valued at around £2.5 billion.
- A share buyback program of up to £750 million was initiated, with the intention to cancel repurchased shares and reduce issued share capital.
- An interim dividend of £768 million (9.5 pence per share) was declared, and a five-year partnership with AWS and Accenture was announced to accelerate digital, data, and AI modernization.
Valuation Changes
Summary of Valuation Changes for NatWest Group
- The Consensus Analyst Price Target remained effectively unchanged, moving only marginally from £5.92 to £5.99.
- The Future P/E for NatWest Group remained effectively unchanged, moving only marginally from 11.04x to 11.23x.
- The Discount Rate for NatWest Group remained effectively unchanged, moving only marginally from 8.34% to 8.46%.
Disclaimer
AnalystConsensusTarget is a tool utilizing a Large Language Model (LLM) that ingests data on consensus price targets, forecasted revenue and earnings figures, as well as the transcripts of earnings calls to produce qualitative analysis. The narratives produced by AnalystConsensusTarget are general in nature and are based solely on analyst data and publicly-available material published by the respective companies. These scenarios are not indicative of the company's future performance and are exploratory in nature. Simply Wall St has no position in the company(s) mentioned. Simply Wall St may provide the securities issuer or related entities with website advertising services for a fee, on an arm's length basis. These relationships have no impact on the way we conduct our business, the content we host, or how our content is served to users. The price targets and estimates used are consensus data, and do not constitute a recommendation to buy or sell any stock, and they do not take account of your objectives, or your financial situation. Note that AnalystConsensusTarget's analysis may not factor in the latest price-sensitive company announcements or qualitative material.