Is the NAB share price a buy at $26?

National Australia Bank Ltd (ASX: NAB) shares have been showing some weakness of late. Is it time to buy the dip?

Sebastian Bowen

Author Bio Sebastian Bowen has been a Motley Fool contributor since late 2018. Sebastian found his passion for writing and educating others about shares and all things finance after completing his studies in political, economic and social science and enjoys bringing this passion to life at the Fool. His investment philosophy is a simple one – buying high-quality companies at prices that make sense. When he’s not researching his next investment at all hours of the morning, Sebastian enjoys classic movies and likes to unwind with a good book, newspaper or record. Areas of Expertise Dividend investing ETFs Education Bachelor of Political, Economic, and Social Sciences (Government and International Relations), University of Sydney Social Media X/Twitter Favorite Investment Quote "In the short run, the market is a voting machine, but in the long run, it is a weighing machine." – Benjamin Graham

Published May 13, 2021 3:16 pm AEST

The National Australia Bank Ltd (ASX: NAB) share price is bouncing around today. At one point, it was up, at another, down. At the time of writing, NAB shares are trading at $25.90. That's down more than 2% from where it was trading yesterday at close. But as my Fool colleague James Mickleboro pointed out this morning, this probably has more to do with NAB shares trading ex-dividend this morning than anything else. Shareholders will be receiving NAB's 60 cents per share, fully franked, on 2 July. Well, shareholders who owned NAB shares yesterday or earlier. Any late entrants today will have to wait for the next dividend. Hence the share price drop.

But this ex-dividend dip could mask some deeper weakness in the NAB share price. Just last week, the ASX bank was hitting a new 52-week high of $27.84, the highest level NAB shares have traversed since late 2019. Investors were initially buoyed by the bank's half-year earnings report that was released a week ago. And fair enough too. This report detailed a 94.8% increase in cash earnings for the bank to $3.34 billion, with rises spread across all divisions. NAB also doubled its dividend. All of the other major banks have also recently reported well-received earnings (or quarterly updates), with the possible exception of Australia and New Zealand Banking GrpLtd (ASX: ANZ). But all of this has seemingly been forgotten. On today's pricing, NAB is now down around 5.3% from its high from last Wednesday

But perhaps this dip is a buying opportunity for NAB. After all, lower share prices are cheaper share prices. And NAB is still a long way from its glory days. Remember, back in 2015 this bank was a $37, $38 share. And way back in 2007, NAB saw upwards of $42 at one point.

asx investor daydreaming about US shares — Image source: Getty Images

Is the NAB share price a buy today?

Well, one commentator who does indeed see some further upside for NAB is Goldman Sachs. According to CommSec, Goldman still has a 'buy' rating on NAB after its earnings report, with a price target of $29.97. That implies an upside of more than 15% on the current price, as well as some dividend returns on top. Goldman likes the look of NAB's cost management initiatives, its dominance of the business banking market, and its well-capitalised capital base.

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