The National Australia Bank Ltd (ASX: NAB) share price is tracking higher in 2022, having set new 52-week highs and gaining 7% in February alone.
It was a month of fundamental momentum and positive sentiment for the Australian banking giant. An earnings release, analyst commentary and market sentiment are all in favour of NAB right now. Let's take a look.
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What tailwinds are behind the NAB share price?
Both analysts and investors alike have been positive on NAB shares throughout February, after the bank released its first-quarter update.
It was a strong period for NAB marked by high cash earnings and better-than-expected margins. Specifically, the bank grew revenue 8% year on year versus the average for 2HFY21 resulting in a 12% gain to cash earnings.
In fact, the results were a positive surprise and analysts were straight on the wires, updating clients with buy calls.
JP Morgan, Goldman Sachs and Citi each instructed clients to pay close attention to the NAB share price. But analysts at Bell Potter agreed with the general sentiment.
The latter holds a $32.50 price target for the bank and notes the strong quarter is a good indication of what's in store come half-year and full-year earnings time.
Curiously, the number of analysts urging clients to buy NAB shares has crept downwards compared to this time last year. At the highest point, 86% of firms advocated it as a buy back in May to July of 2021, according to Bloomberg Intelligence.
As of now, just 65% of analysts rate NAB a buy, whereas the remaining 35% are weighted towards a hold. There are no sell ratings from this list.
Not only that, but market sentiment has been positive lately as well. The NAB share price touched a four-year high in February. And the four-week average trading volume is now approximately 6.9 million shares.
Aside from that, NAB's share price closely tracks the S&P/ASX 200 Financials Index (XFJ) and this benchmark also thrust higher in February, indicating strength in the broad sector (shown below).
NAB wasn't necessarily a standout from the pack, either. Several of the other banking majors joined the ride with NAB in February.
NAB share price summary
In the last 12 months the NAB share price has climbed 14% and is up 0.3% this year to date.
During the past month of trading, NAB shares are up around 4%, meaning NAB is outpacing the broad index this year.
In early trade on Wednesday, the NAB share price is tipping downwards 1.53% at $28.92.
