The National Australia Bank Ltd (ASX: NAB) share price has been a positive performer in 2021.
Since the start of the year, the banking giant's shares have climbed a sizeable 14%.
Where next for NAB shares?
Although the NAB share price is up 14% in 2021, one leading broker believes there's still room for its shares to run higher. That broker is Goldman Sachs. In fact, it currently has NAB shares on its conviction list. According to a recent note, the broker has a conviction buy rating and NAB share price target of $29.97.
Based on the current NAB share price of $26.21, this implies potential upside of 14% over the next 12 months.
In addition to this, the broker is expecting the NAB dividend in 2021 to be on the generous side. Goldman is forecasting a fully franked dividend of $1.24 per share. This represents a yield of 4.7%, which extends the potential return to a total of ~19%.
Goldman commented: "We reiterate our Buy (on CL) on NAB and it remains our preferred sector exposure given: i) NAB's cost management initiatives, which seem further progressed relative to peers, should therefore drive productivity benefits sooner; ii) NAB's position as the largest business bank, we believe it will be a bigger beneficiary of the continued economic recovery (management highlighting improving volumes momentum across the franchise, in particular SME); iii) versus peers, NAB, on a pro-forma basis, is well capitalised (it has significant buffer over target CET1 range of 10.75-11.25%), looks well positioned for capital management."
Is anyone else bullish on the NAB share price?
Another broker that is on the bullish side is Credit Suisse. Its analysts currently have an outperform rating and NAB share price target of $27.50.
However, unlike Goldman Sachs's NAB share price target, this only implies potential upside of 5% over the next 12 months. Though, with Credit Suisse forecasting the NAB dividend in 2021 to be $1.26 per share, the potential return stretches to 10%.
A third opinion
Finally, analysts at Citi are sitting on the fence with NAB shares. Its analysts currently have a neutral rating and $26.25 NAB share price target. This is broadly in line with where NAB shares are trading today.
In respect to the NAB dividend in 2021, Citi has pencilled in a $1.20 per share fully franked dividend. This represents a 4.6% dividend yield based on the latest NAB share price.
Citi was disappointed with recent anti-money laundering (AML) compliance news. That news reveals that AUSTRAC has launched an enforcement investigation into NAB's compliance with AML regulations.
It commented: "Despite almost 4 years of rectification work, at a cost of ~$800m, NAB has continued to report non-compliance issues to regulators concerning their processes, procedures and documentation. We expect NAB will likely be forced to re-prioritise these rectifications under a new AUSTRAC-led timetable. Whilst we are not expecting civil penalties as this stage, higher operating cost growth must be inevitable to meet the regulator's expectations."
Time will tell which broker makes the right call.
