NatWest Group's analyst price target has been increased, with the consensus estimate rising to £6.05 from £5.99. Analysts cite improved revenue growth and margin outlook in recent updates.
Analyst Commentary
Recent Street research on NatWest Group reflects a widely positive outlook, with analysts raising price targets and citing strong fundamentals. Both bullish and cautious perspectives were noted in the latest updates.
Bullish Takeaways- Bullish analysts have significantly raised price targets for NatWest, with several upgrades pushing valuations above previous expectations.
- Improved revenue growth and sustained margin strength have reinforced confidence in the bank's medium-term profitability trajectory.
- Major firms, including JPMorgan, have highlighted NatWest's potential to outperform, increasing their targets based on enhanced operational execution and supportive sector trends.
- Ongoing improvements in efficiency and resilient performance amid market volatility are cited as reasons for upward revisions in stock expectations.
- Some analysts remain cautious and maintain only neutral or sector-perform ratings despite price target increases, which indicates lingering concerns over valuation levels.
- There are questions about the sustainability of margin growth, especially if macroeconomic conditions shift or competition intensifies.
- While targets have moved higher, the pace of upgrades has slowed for some. This signals that the easy gains may be behind, and that future growth could be more incremental.
- Uncertainties around regulatory developments and potential headwinds in the UK banking sector continue to temper the most optimistic projections.
What's in the News
- NatWest is reportedly seeking to sell Cushon, its workplace pensions provider acquired two years ago, as the CEO refocuses on core banking priorities. The sale has attracted notable interest from other pension market firms. (Sky News)
- The bank has begun its latest share buyback program, authorizing the repurchase of up to 3.2 billion shares. The market repurchase of up to £750 million in shares will be cancelled to reduce issued share capital. (Company Announcement)
- An interim dividend of £768 million, or 9.5 pence per share, has been announced for the period ended 30 June 2025. Payment is scheduled for shareholders in September. (Company Announcement)
- NatWest has initiated a new five-year partnership with Amazon Web Services and Accenture to accelerate digital, data, analytics, and AI modernisation. The partnership aims to enhance customer experience and internal capabilities. (Company Announcement)
- The group intends to sell its entire holding in Permanent TSB Group, representing approximately 11.7% of the Irish bank's ordinary share capital. This will be done through a placing to institutional investors. (Company Announcement)
Valuation Changes
- Consensus Analyst Price Target has risen slightly to £6.05, up from £5.99.
- Discount Rate has decreased modestly from 8.46% to 8.39%.
- Revenue Growth expectations have improved, now at 6.39% compared to the previous 5.90%.
- Net Profit Margin has edged higher, increasing to 29.36% from 28.92%.
- Future P/E ratio has decreased fractionally to 11.0x from 11.23x. This indicates a marginally more attractive valuation.
Disclaimer
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