In morning trade, the National Australia Bank Ltd (ASX: NAB) share price is trading lower.
At the time of writing, the banking giant's shares are down approximately 1% to $28.59.
Is the NAB share price in the buy zone?
One leading broker that is likely to see the NAB share price weakness today as a buying opportunity is Bell Potter.
According to a note, the broker has retained its buy rating and lifted its price target on the bank's shares to $32.00.
Based on the current NAB share price, this implies potential upside of 12% for investors over the next 12 months.
And if you include the fully franked 4.4% dividend yield Bell Potter expects in FY 2022, the total return increases to ~16.5%.
What did the broker say?
Bell Potter notes that NAB held its annual general meeting last week. While the broker acknowledges that there are challenges ahead, it remains positive on its overall outlook and has increased its earnings forecasts to reflect this.
The broker is a fan of its business banking segment, which continues to perform well, and has lifted supported a lift in its price target for the NAB share price.
Bell Potter explained: "Our FY22 and FY23 forecast earnings are slightly increased by 1%, all else being equal. We have also slightly increased NAB's valuation by around 3% and this is mainly due to better premiums ahead in Business & Private Banking (FY22 PE 15.5x), Personal Banking (FY22 PE 14.0x) and Corporate & Institutional Banking (FY22 PE 15.0x). Based also on a PB of now 1.6x overall, we have increased NAB's valuation and price target by 3% to $32.00 (previously $31.00). The Buy rating is unchanged."
