The National Australia Bank Ltd (ASX: NAB) share price is rebounding on Wednesday.
In fact, in morning trade, the banking giant's shares have risen 3% to a 52-week high of $29.73.
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Why is the NAB share price rising?
Today's gain appears to have been driven by a positive reaction to NAB's full year results from a number of brokers.
One of those is Goldman Sachs. This morning the broker retained its conviction buy rating and lifted its price target on the bank's shares to $31.15.
Based on the current NAB share price, this implies potential upside of approximately 5%.
And if you include the broker's upgraded forecast for a 143 cents per share fully franked dividend in FY 2022, the total potential return stretches to almost 10%.
What did the broker say?
Goldman notes that NAB's performance in FY 2021 was a touch softer than it was expecting due to its Markets and Treasury segments.
It commented: "NAB reported 2H21 cash earnings growth of 61% on pcp to A$3,215mn, 1% below GSe, driven by lower-than-expected revenues (Markets and Treasury) and higher operating expenses, partially offset by outperformance on BDDs."
However, it remains positive on the NAB share price. This is due to the progress of its cost management initiatives and its leadership position in business banking.
Goldman explained: "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, have freed up investment spend to be more directed towards customer experience (50% in FY22 from 39% in FY21) as opposed to infrastructure; ii) given NAB's position as the largest business bank, we believe it will benefit more from the continued economic recovery (management is seeing all segments in its Business & Private Bank exhibiting solid growth without sacrificing margin, and asset quality remains pristine); iii) good balance sheet momentum with NAB expecting at or above system growth across all divisions; and iv) our TP offers c. 13% TSR potential [at the time time]."
