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Broker says NAB (ASX:NAB) share price offers 12% upside plus dividends

Here’s why NAB’s shares could be in the buy zone…
The post Broker says NAB (ASX:NAB) share price offers 12% upside plus dividends appeared first on The Motley Fool Australia. –

In morning trade, the National Australia Bank Ltd (ASX: NAB) share price is trading lower.

At the time of writing, the banking giant’s shares are down approximately 1% to $28.59.

Is the NAB share price in the buy zone?

One leading broker that is likely to see the NAB share price weakness today as a buying opportunity is Bell Potter.

According to a note, the broker has retained its buy rating and lifted its price target on the bank’s shares to $32.00.

Based on the current NAB share price, this implies potential upside of 12% for investors over the next 12 months.

And if you include the fully franked 4.4% dividend yield Bell Potter expects in FY 2022, the total return increases to ~16.5%.

What did the broker say?

Bell Potter notes that NAB held its annual general meeting last week. While the broker acknowledges that there are challenges ahead, it remains positive on its overall outlook and has increased its earnings forecasts to reflect this.

The broker is a fan of its business banking segment, which continues to perform well, and has lifted supported a lift in its price target for the NAB share price.

Bell Potter explained: “Our FY22 and FY23 forecast earnings are slightly increased by 1%, all else being equal. We have also slightly increased NAB’s valuation by around 3% and this is mainly due to better premiums ahead in Business & Private Banking (FY22 PE 15.5x), Personal Banking (FY22 PE 14.0x) and Corporate & Institutional Banking (FY22 PE 15.0x). Based also on a PB of now 1.6x overall, we have increased NAB’s valuation and price target by 3% to $32.00 (previously $31.00). The Buy rating is unchanged.”

The post Broker says NAB (ASX:NAB) share price offers 12% upside plus dividends appeared first on The Motley Fool Australia.

Should you invest $1,000 in NAB right now?

Before you consider NAB, you’ll want to hear this.

Motley Fool Investing expert Scott Phillips just revealed what he believes are the 5 best stocks for investors to buy right now… and NAB wasn’t one of them.

The online investing service he’s run for nearly a decade, Motley Fool Share Advisor, has provided thousands of paying members with stock picks that have doubled, tripled or even more.* And right now, Scott thinks there are 5 stocks that are better buys.

*Returns as of August 16th 2021

More reading

5 things to watch on the ASX 200 on Monday

Is the NAB (ASX:NAB) share price great value? Goldman thinks it is

Sustainable change? NAB (ASX:NAB) share price spikes after AGM today

5 things to watch on the ASX 200 on Friday

Why ASX 200 shares could add ~$70bn during the Santa Rally

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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