The National Australia Bank Ltd. (ASX: NAB) share price has risen by 9% in 2022 to date.
It has gone through volatility over the last few months, like many businesses. But NAB shares show ongoing growth over longer time periods.
In the past six months, the NAB share price has gone up by 16%. In the last 12 months, the NAB share price has risen by around 22%.
But after outperforming the S&P/ASX 200 Index (ASX: XJO) over each of the above time periods, is the big four ASX bank now fully valued or is it still an opportunity?
Broker opinions on the NAB share price
Lots of analysts now think that the bank offers very little capital growth upside. A few have price targets that are lower than where NAB is today.
For example, both Morgans and Citi have a price target of $30.50. That implies a decline of around 5% over the next year if the brokers are right. However, they have ratings of a hold and neutral on the big four ASX bank.
Morgan Stanley is another broker that doesn't think the NAB share price will do much over the next 12 months. It has a price target of $31.50 on the bank. That suggests a possible decline of around 2% over the next 12 months.
Credit Suisse is a broker which has a slightly positive outlook for the bank, which is also neutral, with a price target of $32.40. This broker thinks that banks are going to benefit once the Reserve Bank of Australia (RBA) starts increasing the interest rate. The broker thinks the net interest margin (NIM) will increase over the next year.
One of the most positive brokers is Ord Minnett. It has a NAB share price target of $33.50. That implies a potential rise of 4.3% in the next year.
Share buyback
One of the things that brokers have noticed is the bank's recent share buyback.
NAB recently completed a $2.5 billion on-market buyback and announced a further on-market buyback of up to $2.5 billion.
This will allow the bank to continue managing its common equity tier 1 (CET1) capital ratio towards its target range of between 10.75% to 11.25% over time.
The NAB CEO Ross McEwan said:
Our capital management strategy reflects the importance of maintaining a strong balance sheet through the cycle while allowing us to continue to support growth and deliver improved shareholder returns.
The further $2.5 billion on-market buy-back announced today supports our ambition to reduce share count and increased sustainable ROE (return on equity) benefits to our shareholders.
NAB share price snapshot
After the 0.3% increase on Tuesday, NAB has a market capitalisation of $103 billion according to the ASX.
