Although the National Australia Bank Ltd (ASX: NAB) share price is trading lower today, that couldn't stop it from hitting a new 52-week high of $31.84 on Friday in early trade.
When the NAB share price reached that level, it meant it was up an impressive 23% over the last 12 months.
Can the NAB share price keep rising?
The good news for shareholders is that one leading broker believes the NAB share price still has decent upside potential.
According to a note out of Bell Potter, its analysts have retained their buy rating and lifted their price target on the bank's shares to $34.50.
This implies potential upside of almost 9% for investors over the next 12 months. And if you include the 4.3% fully franked dividend yield Bell Potter is forecasting in FY 2022, the total return on offer stretches to over 13%.
What did the broker say?
Bell Potter notes that NAB has completed its $2.5 billion on-market share buy-back and announced a further buy-back of up to $2.5 billion.
Combined with its forecast for higher net interest income, this has led to the broker increasing its earnings per share forecasts from FY 2023. The broker explained:
"NAB's cash earnings are increased by 3% from FY25e, mainly due to higher net interest income (up to 1% from FY25e) and even higher other banking income (3-12% in FY23e through to FY25e from reversion back to normalcy especially in business/private and corporate/institutional banking).
These are offset to some extent by higher credit impairment charges (by up to 15bp – previously 12bp – in FY25e). In addition to lower dividend valuation yield of 3.75% (discount rate is maintained), the price target is therefore increased by $2.00 to $34.50. NAB's Buy rating is retained."
All in all, this could make the NAB share price one to consider if you're looking for exposure to the banking sector.
