Up 16% in four months, is it too late to buy NAB shares?

One broker is still bullish on this ASX bank…

| More on:
A businessman in a suit wears a medal around his neck and raises a fist in victory surrounded by two other businessmen in suits facing the other direction to him.

Image source: Getty Images

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

It's been a top time for the National Australia Bank Ltd (ASX: NAB) share price over the past four months or so. Back in early June, this ASX 200 bank share was trading at just over $25. But today, those same NAB shares are asking $29.12 each, albeit down 0.68% so far today.

That means the NAB share price has risen by an impressive 16% or so over just the past four months. This compares favourably against the broader S&P/ASX 200 Index (ASX: XJO), which has lost around 1% of its value over that same period.

One of the catalysts for NAB shares' recent run appears to have been the quarterly update we saw in August. As we covered at the time, NAB reported a 5.8% increase in cash earnings to $1.9 billion for the three months ending 30 June 2023. That's in addition to a statutory net profit of $1.75 billion. This allowed the bank to initiate a $1.5 billion on-market share buyback program.

This large share buyback scheme has also probably helped NAB shares rise over the past few months as well.

But now that this ASX bank share has risen so enthusiastically over the past few months, many investors are probably wondering whether it is too late to buy NAB shares. So, let's discuss that proposition.

Is it too late to buy up NAB shares today?

Well, one ASX broker who is recommending the NAB share price right now is Goldman Sachs. As we covered last week, Goldman has given NAB a buy rating. That came with a 12-month share price target of $30.51.

Goldman points to NAB's commercial loan books, as well as its recent productivity gains (particularly measured against other ASX banks), as reasons for its bullish outlook.

If the broker's share price target is realised, this would see investors enjoy an upside of just over 4.6% over the coming 12 months. That's alongside any dividend returns, of course.  Speaking of dividends, Goldman also expects NAB shares to pay out a fully-franked $1.66 in dividends per share over both the 2023 and 2024 financial years.

If Goldman is on the money there, it would give NAB shares a forward dividend yield of around 5.7% today.

But Goldman Sachs isn't the only one eyeing this ASX bank today.

Last month, we also covered how NAB's own director, Christine Fellowes, picked up almost $100,000 worth of NAB shares in early September. Fellowes reportedly paid an average of $29.04 per share for this investment.

So it seems that more than one expert investor is eyeing NAB shares at their current levels, despite the pleasing leap in the NAB share price that we've seen since early June.

Motley Fool contributor Sebastian Bowen has positions in National Australia Bank. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has positions in and has recommended Goldman Sachs Group. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

More on Bank Shares

A male investor wearing a white shirt and blue suit jacket sits at his desk looking at his laptop with his hands to his chin, waiting in anticipation.
Bank Shares

'Lower returns likely in FY24': Bank of Queensland shares dip amid AGM first strike

CEO tells shareholders to expect lower returns next financial year.

Read more »

A man sits in contemplation on his sofa looking at his phone as though he has just heard some serious or interesting news.
Bank Shares

Westpac share price shrugs off online banking outage woes

Westpac reported its online and mobile banking disruptions have been resolved.

Read more »

A man sits thoughtfully on the couch with a laptop on his lap.
Bank Shares

Own Bank of Queensland shares? You just had a November to remember

Bank of Queensland delighted shareholders last month. What went down?

Read more »

Young boy in business suit punches the air as he finishes ahead of another boy in a box car race.
Bank Shares

Here's why the CBA share price raced ahead of rival ASX 200 bank stocks in November

CBA shareholders booked some outsized gains in November.

Read more »

Friends at an ATM looking sad.
Bank Shares

3 ASX 200 bank stocks making headline news this week

These three ASX 200 banks were back in the news this week.

Read more »

a dog sleeping with cucumbers on his eyes
Dividend Investing

Buy 194 shares in this top ASX 200 dividend stock for $873 in passive income

This top ASX 200 dividend stock boosted its passive income payments after delivering $10.2 billion in FY 2023 profits.

Read more »

A woman has a thoughtful look on her face as she studies a fan of Australian 20 dollar bills she is holding on one hand while he rest her other hand on her chin in thought.
Bank Shares

Should I buy ANZ shares for the 7% dividend yield?

ANZ is standing out from the banking pack right now.

Read more »

A man holds his hand under his chin as he concentrates on his laptop screen and reads about the ANZ share price
Share Market News

Playing fair: Could the big four ASX bank shares be in hot water again?

A federal Senate inquiry into bank branch closures in regional areas began today.

Read more »