Shares in National Australia Bank Ltd. (ASX: NAB) are heading north today to sit marginally higher on the day at $28.95 apiece.
Whilst many of the ASX banking majors are suffering losses in 2022, NAB has held the fort and is sitting less than 1% in the green. It has traded relatively sideways with wide volatility since October, as shown below.
Analysts at JP Morgan are bullish on the bank and reckon it will outstrip its peers on the chart for the remainder of FY22 at least.
Here are the details.
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NAB to shine in 2022?
JP Morgan analysts were pleased with NAB's latest results and note that the bank achieved the most impressive result in 1Q22 compared to the other big 4.
"Pleasingly NAB delivered the strongest top-line growth in 1Q22 (5% growth on 2H21 quarterly avg) on above-system lending growth and underlying [net interest margin] NIM down only 2 basis points", the broker said.
"While we don't expect this pace to persist, the result reflects not only less exposure to mortgages, but sound execution across housing, SME & Insto".
In fact, the quarter was one of the strongest in NAB's history and the broker says this was assisted by strong credit growth both in Australia and New Zealand.
Analysts at the firm also estimated that markets and treasury (M&T) revenue increased to $430 million, a 48% gain versus the entire 2H FY21 quarterly average.
With respect to credit growth, the broker reckons growth trends are set to continue here, particularly when examining on a peer-to-peer basis.
"We see little evidence to suggest it cannot sustain this momentum, especially in the non-housing segment, where has a peer-leading SME franchise", it remarked with respect to credit growth.
Aside from that, JP Morgan was happy with NAB's customer metrics and reckons it is well-positioned to capitalise on any hike to base interest rates in the coming months.
The broker sets a price target of $33.50 per share, meaning investors will realise a 16% upside at the current market price should this thesis come true.
NAB share price snapshot
In the last 12 months, the NAB share price has held gains. It is up more than 8% after climbing less than 1% into the green since trading recommenced on 4 January.
During the past month of trading, shares have gained 4%, indicating the bullish momentum behind the bank.
