The National Australia Bank Ltd (ASX: NAB) share price is pushing higher again on Friday.
In morning trade, the banking giant's shares are up over 1% to $27.62.
This latest gain means the NAB share price is now up 21% since the start of the year.
Can the NAB share price keep climbing?
The good news for investors is that Goldman Sachs is tipping the NAB share price to continue its rise.
According to a note, the broker has retained its conviction buy rating and lifted its price target to $30.62.
Based on the latest NAB share price, this implies potential upside of almost 11% over the next 12 months excluding dividends. Including dividends, this potential return stretches to over 15.5%.
What did the broker say?
Goldman Sachs was pleased with NAB's performance in the third quarter. It notes that the bank is tracking ahead of its second half expectations.
It said: "NAB reported unaudited cash earnings from continuing operations of A$1.70 bn, up 1% on the previous period average, run-rating 11% ahead of what was implied by our previous 2H21E forecasts (lower BDDs). PPOP trends were softer on account of weak Markets and Treasury revenues and 3Q21 CET1 ratio of 12.6% was running ahead of our forecasts."
This stronger than expected performance led to Goldman Sachs upgrading its earnings estimates for FY 2021 and FY 2022. This underpinned the increase in its NAB share price target.
Why is Goldman bullish?
NAB is the broker's preferred sector exposure due to four key reasons. These are its cost management initiatives, its position as the largest business bank, its management of volumes and margins, and its potential return.
In respect to its cost management, Goldman said: "NAB's cost management initiatives, which seem further progressed relative to most of its peers, should drive productivity benefits sooner and free up investment spend to be directed more towards customer experience, as opposed to infrastructure (3Q21 update shows NAB is tracking well against this)."
And Goldman feels that NAB's position as the largest business bank and its investment in its mortgage capability means it is "strongly positioned to benefit from the current recovery in both housing and commercial volumes."
All in all, the NAB share price may be smashing the market this year, but this leading broker doesn't believe the run is over.
