The National Australia Bank Ltd. (ASX: NAB) share price is having an interesting trading day today so far. At the time of writing, NAB shares are up 0.13% to $26.86 a share. Earlier in the trading day, NAB traded as high as $26.95 and as low as $26.69. Perhaps the market can't quite decide what it wants today.
Either way, it's not a bad level for NAB to be at right now. At the current share price, NAB is just a touch below its 52-week high of $27.10 a share. And a long way from its 52-week low of $15.
As my Fool colleague Tristan Harrison pointed out yesterday, a lot has been going right for this ASX banking share. The banks' financial position is strong, seeing as NAB has plenty of cash around. The Australian economy is also rebounding well, which is especially beneficial for a bank.
But according to a report in the Australian Financial Review (AFR), there could be further upside in the wings for NAB, as well as the other ASX banks.
An ASX banking tailwind for NAB?
According to the AFR report, David Cassidy, head of Australian equity strategy at Wilsons Advisory, believes that the ASX banks like NAB are set to enjoy another 6 months of share price appreciation. That would equate to another 15% upside to the current share prices of the ASX banks.
Mr Cassidy bases this prediction on a few factors. Firstly, what turned out to be over-provision that the banks undertook in response to the pandemic last year is set to wind down. That should allow banks like NAB to lend out more capital. That will be assisted by faster economic growth, which Mr Cassidy predicts will result in earnings upgrades. In turn, that should lead to higher dividend payouts.
Reportedly, Cassidy is still wary of the Commonwealth Bank of Australia (ASX: CBA) share price on its current valuation and price-to-book ratio. But Cassidy tells the AFR that Wilsons is 'overweight' NAB. As well as Westpac Banking Corp (ASX: WBC) and Australia and New Zealand Banking Group Ltd (ASX: ANZ). Despite long-term issues, he sees a "more normalised price-to-book valuation being achieved, powered by what looks like a convincing cyclical recovery story" for these banks.
NAB shareholders will certainly be hoping Mr Cassidy is right.
