It wasn't that long ago that the National Australia Bank Ltd (ASX: NAB) share price was delighting its investors with a series of new 52-week highs. It was only last Wednesday that NAB shares broke the $30 mark for the first time since September 2019. And back then, it was a fleeting affair.
The last time NAB consistently traded above $30 a share was back in 2017. Yet on 10 November, we saw NAB hit a new 52-week high of $30.30 a share. Year to date until that point, NAB was then up a very pleasing 30.5%. But the past 3 weeks or so have brought NAB shares back to earth. This ASX bank is today trading at $27.34 a share, down a nasty 1.14% so far today.
That means that the NAB share price has given up close to 10% since hitting this new high just this month. It also means that, as of today, NAB's year to date gains in 2021 so far have fallen to 'just' 19.5%. So with this tumble… correction… or whatever else you want to call this short-but-sharp fall, could NAB shares be in the buy zone today?
Top ASX broker puts NAB shares in the buy zone
Well, one ASX broker thinks so. Investment bank and broker Goldman Sachs currently rates the NAB share price as a buy with a 12-month share price target of $31.15. That implies a potential future upside of almost 14% on current pricing, not including any dividend returns.
So Goldman rates NAB as its preferred ASX bank right now. It cites NAB's "cost management initiatives, which seem further progressed relative to peers", as well as NAB's "position as the largest business bank". This, Goldman posits, will allow NAB to enjoy relatively higher successes from the continuing economic recovery.
Goldman also rates NAB's current balance sheet as strong and enjoying momentum from "growth across all divisions". It's also expecting modest annual dividend rises over the next few years, going from $1.27 in dividends per share in FY21 to $1.48 in dividends per share by FY2024.
No doubt investors will be hoping that these predictions play out.
At the current NAB share price of $27.34, this ASX bank has a market capitalisation of around $89 billion, with a price-to-earnings (P/E) ratio of 14.57 and a dividend yield of 4.64%.
