The National Australia Bank Ltd (ASX: NAB) share price has tracked 8% higher in 2022 after strengthening in January.
However, the NAB share price has levelled off its previous highs and traded down during the past month, leading to many questions about the bank's valuation and where it might head next.
The bank's shares finished the day trading at $31.32 per share, 0.58% higher than their previous close.
Is the NAB share price cheap?
Analysts at JP Morgan have a June 2023 price target on National Australia Bank shares of $34.50, a step above the current market price.
The broker is bullish on the bank. It believes its pre-provision profit growth will continue outstripping peers and that it is "well placed to deliver ongoing growth".
The broker said in a recent note:
We have an overweight recommendation on NAB reflecting stronger-than-peer revenue growth prospects, likely sound cost control, leverage to rising rates, and ongoing capital management.
NAB's loan book grew at a 10% annualised pace in the half which was broad-based across divisions. Despite this, margins were well managed, down just 2 basis points half-on-half excluding Markets & liquids.
NAB looks well placed to drive further healthy growth, with a strong capital surplus and recent investments in processes, technology and people opening up opportunities across the markets it addresses.
Meanwhile, the number of buy and hold calls is evenly split amongst brokers covering the stock, according to data from Bloomberg.
There are no sell ratings from this list and the consensus price target is $33.34. What one makes of this is up to them but the stock is positioned only 6% below this value. Thus, calling it 'cheap' in value terms may be questionable.
The NAB share price has clipped a 20% gain in the last 12 months but has cooled off alongside the wider banking sector during May.
