The National Australia Bank Ltd (ASX: NAB) share price is falling on Wednesday.
In morning trade, the banking giant's shares are down 1.5% to $28.30.
Why is the NAB share price falling?
The NAB share price appears to be falling today due to broad weakness in the banking sector.
This follows a bank selloff on Wall Street overnight amid news that Fitch has warned that it may have to downgrade the credit rating on dozens of US banks.
The good news is that one leading broker is likely to see today's weakness as a buying opportunity.
According to a note out of Goldman Sachs, its analysts were pleased with the bank's quarterly update and continue to recommend its shares as a buy.
NAB named as a buy
Today's note reveals that Goldman has retained its buy rating with an ever-so-slightly trimmed price target of $30.51.
Based on the current NAB share price, this implies a potential upside of almost 8% for investors over the next 12 months.
But the returns won't stop there. Goldman is forecasting fully franked dividend yields of 6% for the next three financial years. This boosts the total potential 12-month return to approximately 14%.
What did the broker say?
Goldman was pleased with NAB's third-quarter update and highlights that its earnings are tracking ahead of expectations. It said:
NAB has released its 3Q23 trading update, with unaudited cash earnings from continuing operations of A$1.9 bn, down 7% on the 1H23 average, but run-rating 5% above what was implied by our prior 2H23E forecasts. The better than expected performance was driven by stronger revenues (Markets) and lower BDDs. PPOP was down 5% on the 1H23 average, and 2% ahead of what was implied by our prior 2H23E forecasts.
In light of this, the broker has boosted its earnings estimates accordingly. It concludes:
We revise our FY23/24/25E EPS: +1.7%/+0.2%/-0.3%. As a result of our EPS changes, our 12-month TP moves to A$30.51 (from A$30.69) implying 14% TSR potential.
