Shares in banking giant National Australia Bank Ltd. (ASX: NAB) edged higher on Thursday to finish trading at $28.69, up 0.21%.
It's been a fairly stable year for the NAB share price, as volatility has been constrained and periods of drawdown have been short-lived.
Each downtick in price action has seen NAB springboard off the bottom and climb to new 52-week highs in the days to weeks afterwards.
As such, shareholders have enjoyed a 22% upside in the last 12 months, after shares have rallied a further 27% this year to date, beating the benchmark S&P/ASX 200 Index (ASX: XJO)'s return of 10% in the last year.
With this in mind, we ask – what's the outlook for NAB investors in 2022? Read on to see what the experts are saying.
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What can NAB investors expect in 2022?
In terms of financial performance, data provided by Bloomberg Intelligence reveals that the majority of analysts expect NAB to deliver $17.63 billion in revenue in FY22, which could carry through to $6.4 billion in net profit after tax (NPAT).
This calls for a net margin of 36.5%, and earnings per share (EPS) of $1.95 in FY22. Compared to FY21, that's a growth of 3.6%. At present, the bank's total capital ratio is 18.91% as of FY21.
The team at JP Morgan reckon there are plenty of legs left in the NAB share price next year and retain an overweight rating on the stock.
JP Morgan's stance is reflective of what it deems as NAB's "stronger-than-peer revenue growth prospects more than offsetting uncertainty on potential enforcement action from AUSTRAC on AML".
Not only that, the broker notes NAB's stronger revenue profile versus its peers, and that this reflects NAB's tilt towards small business banking, which should insulate it from return on equity (ROE) pressures in retail banking.
Whilst it acknowledges that there are still headwinds on the horizon for NAB, JP Morgan has these factored into its forecasts and still sees NAB's "pre-provision profit growth outstripping peers".
As such it has a December 2022 price target of $31.40 on the share price, a number which NAB is gradually encroaching on, given its current trajectory.
What is the sentiment on NAB for 2022?
Jarden Securities is equally as bullish on the banking sector and likes the recent focus of Aussie banks in capital management, and cost efficiency over the medium term. It values NAB at $31 a share.
Jefferies is the most bullish on NAB, folding in a $32.60 price target on the share, whereas JP Morgan is a close second.
Goldman Sachs, Bell Potter, Jarden and Barrenjoey each value NAB at $31 a share, whereas Macquarie reckons the bank is worth $30.50 per share.
In fact, the bulk of analysts covering NAB – 62.5% to be exact – have NAB as a buy. The average price target of the analyst group is $30.14, according to the list provided by Bloomberg Intelligence.
With this in mind, taking the wisdom of the crowd, this average figure implies an upside potential of 4.7% at the time of writing.
Hence, the sentiment is bullish on NAB shares and going by what these experts think, it may be a period of marginal growth in FY22 for the company's share price. However, do note that price targets change often on the back of earnings results, and this may very well be the case for NAB early in FY22.
