Own NAB shares? You just got a 44% return in FY24

NAB shot the lights out in FY24. Will FY25 be different?

| More on:
A woman wearing a flowing red dress, poses dramatically on a beach with the sea in the background.

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

Normally, the phrases '40% return' and 'bank shares' aren't uttered in the same sentence. ASX bank shares like National Australia Bank Ltd (ASX: NAB) are known for many things.

Fat, fully franked, market-leading dividends would be the obvious choice. Stable, mature business models and multi-decade presences on the ASX could also be thrown around.

But 40% returns in 12-month periods? That's certainly a new one.

Yet that's exactly what NAB shares have delivered for their investors over the financial year just gone. Yep, NAB shares rose by a whopping 35.6% over the 2024 financial year.

Want proof? Well, NAB shares started FY24 at $26.37 each. But by the time trading wrapped up last Friday, those same shares closed at $36.23. That's a capital gain of 37.39% alone.

If you want visual proof, just check out the graph below:

But then we have to factor in NAB's hefty dividend payments as well. Over the financial year that's just passed us by, NAB doled out two fully franked dividend payments. As is the bank's typical habit.

Last July saw an interim dividend worth 83 cents per share paid out. Then we had December's final dividend, worth 84 cents per share.

Together, this $1.67 in dividends per share would have resulted in investors enjoying an additional yield of 6.33% over FY24, going off the bank's FY24 starting price. So all up, investors have bagged a massive 43.7% in total gains from NAB shares last financial year.

What about NAB shares in FY25?

So NAB has had a phenomenal FY24. But what about the now-current financial year? Can investors expect another 40%-plus windfall from their NAB shares?

Unfortunately, it doesn't look good, at least according to some ASX experts.

Last month, my Fool colleague Tristan covered the views of ASX broker UBS. UBS did note that it expects NAB to grow profits over both FY24 and FY25, which bodes well for NAB's dividend payments. However, that wasn't enough for UBS to hold back in issuing a 'sell' rating on the NAB share price.

The broker simply sees NAB as "fully valued" at its current pricing, and gives the bank a 12-month share price target of $30. If realised, that would see investors take a 16% haircut from where the shares are today.

Just over a month ago, we also looked at the view of another broker in Goldman Sachs. Goldman voiced similar concerns, noting that NAB "trades well above its 15-year average" and that all ASX banks are "close to record expensive".

Goldman gave NAB shares a neutral rating at the time, with a share price target of $34.04.

So it seems most ASX experts aren't liking what they see with NAB shares at the current price. That's certainly something for investors to keep in mind after such a bumper FY24.

Motley Fool contributor Sebastian Bowen has positions in National Australia Bank. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. 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

Bank building with the word bank in gold.
Earnings Results

4 ASX 200 bank shares with earnings updates next week

Three of Australia's 'Big Four' banks plus a regional bank will report to the market next week.

Read more »

Animation of a man measuring a percentage sign, symbolising rising interest rates.
Bank Shares

Here's what Westpac says the RBA will do with interest rates next week

Is relief coming at last for borrowers? Here's what the bank is predicting.

Read more »

A woman wearing the black and yellow corporate colours of a leading bank gazes out the window in thought as she holds a tablet in her hands.
Bank Shares

Where could the CBA share price go in the next 12 months — see the latest forecasts

Where will CBA shares go next?

Read more »

Modern accountant woman in a light business suit in modern green office with documents and laptop.
Bank Shares

CBA share price sinks despite big government news

CBA announced a new government partnership on Friday.

Read more »

A woman wearing a yellow and white striped top and headphones plays excitedly with her phone.
Bank Shares

$167: Have CBA shares become a 'meme stock'?

CBA shares have hit yet another new record high this Thursday.

Read more »

a young boy dressed in a business suit and wearing thick black glasses peers straight ahead while sitting at a heavy wooden desk with an old-fashioned calculator and adding machine while holding a pen over a large ledger book.
Bank Shares

Own ANZ shares? Here's what to watch in next week's report

What will be included in next week's quarterly update?

Read more »

A man holds his head in his hands, despairing at the bad result he's reading on his computer.
Earnings Results

CBA shares drop despite strong first-half profit result and dividend boost

Investors appear to have been wanting an even stronger result from Australia's largest bank.

Read more »

A man looking at his laptop and thinking.
Bank Shares

Own NAB shares? What to watch in next week's trading update

Owners of this bank’s shares should keep an eye on this upcoming report. 

Read more »