Insights

Is now a good time to buy NAB (ASX:NAB) shares?

A share buyback might be what NAB needs to get its share price moving again.
The post Is now a good time to buy NAB (ASX:NAB) shares? appeared first on The Motley Fool Australia. –

The National Australia Bank Ltd(ASX: NAB) share price has moved sideways since early March, up just 3%. However, this could change following the banking giant’s recent announcement that it will conduct a buyback of its shares.

On Friday’s closing bell, NAB shares finished the day up 0.62% to $25.93.

Could NAB shares be a buy?

Over the coming months, NAB will undertake a buyback of up to $2.5 billion of its ordinary shares on-market. Expected to commence mid to late August 2021, the bank will reduce its surplus capital whilst increase shareholder value.

Basically, this means that when NAB buys back its shares, the number of shares on its registry will decrease. With a lesser amount, this effectively increases the value of each share as the revenue and profits remain the same.

Traditionally when this occurs, a company’s share price tends to rise over time.

In addition to the buyback, NAB announced that it has engaged with Citigroup Inc about the potential acquisition of its Australian consumer business. NAB noted that it regularly assesses opportunities to take over businesses that support its growth strategy in core banking markets.

What do the brokers think?

In mid-June, Australian investment house Morgans cut its rating on NAB shares by 5.2% to $27.50.

Following suit last week, Bell Potter raised its outlook by 12% on the bank’s shares. The Australian investment advisory firm put a 12-month price target of $27.50. This implies an upside of around 6% at the current NAB share price.

NAB share price snapshot

Both NAB shares and the S&P/ASX 200 Index (ASX: XJO) have tracked similarly year to date, up 14% and 12%, respectively. However, when looking at the past 12 months, the NAB share price has recorded a 43% return, while the ASX 200 is sitting 22% in the green.

Based on valuation grounds, NAB has a market capitalisation of roughly $85.5 billion, making it the fifth largest company on the ASX.

The post Is now a good time to buy NAB (ASX:NAB) shares? 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 May 24th 2021

More reading

ASX 200 Weekly Wrap: ASX grinds to a halt following new all-time high

ASX 200 falls, NAB rises, Afterpay sinks

ASX 200 midday update: NAB’s $2.5bn buyback, Origin shares sink

NAB (ASX:NAB) share price on watch after announcing $2.5bn buy-back
Is the NAB (ASX:NAB) share price good value ahead of earnings season?

Motley Fool contributor Aaron Teboneras 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.

Trade The World Anywhere & Anytime!

Mobile app platform with over 50,000 global listed securities across 12 markets (over 70% global market capitalisation), right from your Android or iOS device.

Integrated with exclusive trading idea and investment analysis tools to help you find actionable insight on virtually every financial instrument across our 12 global markets, to help you optimise your trading strategies.

Refer Your Friends

Tell your friends about Monex and gift them FREE access to our trading tools.

We respect your privacy and will only send this one email notification to your friends. 

Share With Your Friends

Share on facebook
Share on twitter
Share on linkedin

Monex Trading Tools Access and Usage Terms

The Monex Trading Tools (referred to as ‘tools’ hereafter) are available to you inside your client portal;


To activate access to the tools, you must have a verified and approved trading account and have made a deposit of at least AUD $1000.


An active and funded account with a positive trading balance is required to continue to have access to the tools;


Although the tools are available to you indefinitely, Monex Securities may at it’s discretion disable access to the tools in the future;


Monex securities reserves the right to change these terms and conditions from time to time, as it sees fit, without notice.

Important Notice
iOS & Android App - 12 International Markets & Over 70% Global Market Cap. $0 Brokerage On US Trades. Click Here!