NatWest Group's analyst price target has increased, with recent revisions raising the target from approximately £6.10 to levels as high as £7.00. Analysts cite improved profit outlook and robust sector fundamentals in their assessments.
Analyst Commentary
Recent adjustments to NatWest Group's price targets reflect a mix of optimism and measured caution among market observers. Analysts have responded to improved sector trends and company-specific developments with notable revisions in their outlooks.
Bullish Takeaways
- Bullish analysts have significantly increased price targets on NatWest, with upward revisions reaching as high as 700 GBp. This signals growing confidence in the company’s future prospects.
- Further price target hikes are attributed to improved profitability expectations, driven by robust sector fundamentals and stable execution from management.
- Strong balance sheet positioning and a resilient earnings outlook are viewed as supportive factors that may enable NatWest to continue outperforming sector peers.
- Valuation multiples are considered attractive by some, especially in light of recent earnings momentum and positive revisions in consensus forecasts.
Bearish Takeaways
- Bearish analysts have maintained more neutral ratings despite raising price targets. They note that the current valuation already reflects much of the anticipated earnings growth.
- Some caution is expressed regarding execution risks, particularly around delivering sustainable revenue growth in a competitive environment.
- Concerns remain about the potential for macroeconomic headwinds to impact sector-wide fundamentals, which could affect NatWest’s performance.
- Market observers also highlight the need for consistent capital returns and further clarity on long-term strategic direction to justify further re-rating.
What's in the News
- NatWest Group is reportedly seeking to sell Cushon, the workplace pensions provider it acquired two years ago, as part of a strategic refocus on core banking priorities. The bank is in detailed talks with multiple potential buyers for its 85% stake in Cushon. (Sky News)
- The company commenced a new share repurchase program on July 28, 2025. It has been authorized to buy back up to 10% of its issued share capital, with total repurchases of up to £750 million. The repurchased shares will be cancelled to reduce issued share capital. (Company Announcement)
- NatWest Group has declared an interim dividend of £768 million, equal to 9.5 pence per ordinary share. The dividend will be paid on September 12, 2025, to shareholders on record as of August 8, 2025. (Company Announcement)
- Media reports indicate NatWest is among firms approached to potentially acquire Evelyn Partners, a major UK wealth management company, as private equity owners explore a sale estimated at £2.5 billion. (Financial Times)
Valuation Changes
- Fair Value Estimate remains unchanged at £6.05, reflecting stability in the underlying valuation model.
- The discount rate has risen slightly from 8.39% to 8.40%, indicating a marginal increase in perceived risk or cost of capital.
- Revenue growth forecasts are essentially unchanged, holding steady at approximately 6.39%.
- Net profit margin projections show negligible change, remaining around 29.36%.
- Future P/E ratio estimates have increased only marginally from 11.00x to 11.01x.
Disclaimer
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