The National Australia Bank Ltd (ASX: NAB) share price has been solid performer so far in 2020.
Since the start of the year the banking giant's shares have climbed almost 4.5% higher.
Is it too late to invest?
I don't believe it is too late to invest and still see a lot of value in NAB's shares at the current level.
I'm not alone with this view. A broker note out of Goldman Sachs this week reveals that its analysts have reiterated their conviction buy rating and $29.84 price target on its shares.
This price target implies potential upside of more than 16% over the next 12 months excluding dividends. Including dividends, this potential return stretches to approximately 23%.
Why is Goldman Sachs bullish on NAB?
According to the note, NAB is the broker's preferred pick in the banking sector.
In fact, it is the only Australian bank that its analysts are rating as a buy right now. Goldman reiterated its sell rating on Commonwealth Bank of Australia (ASX: CBA) and its neutral ratings on the other two big four banks.
Goldman believes NAB will deliver the strongest earnings per share growth (before one-offs) in the group over the next three years and feels this is not being reflected in its share price.
The broker explained: "NAB remains our preferred bank exposure and only Buy based on our view that its revenue momentum will remain superior to peers, driven by its overweight exposure to SME, which remains a relative tailwind for volumes and margins."
"Coupled with it being on track to deliver flat expense growth in FY20E (ex-notable items), we forecast NAB to deliver top-of-peer PPOPps growth over the next three years, which we do not believe is reflected in its 18% PPOP multiple discount to peers (13% avg.)."
I think Goldman Sachs is spot on and would be a buyer of NAB's shares right now.
