National Australia Bank Ltd (ASX: NAB) shares could be worth watching over the next few weeks. The ASX bank share is due to hand in its full-year result on 7 November 2024, and some investors may be wondering if this is a good time to invest.
As we can see on the chart above, it has been a great period to be a shareholder of the bank because it has risen 27% in 2024 to date. That compares to a 9% rise for the S&P/ASX 200 Index (ASX: XJO).
One of the leading brokers in Australia has given a number of interesting thoughts about the ASX bank share and whether it's a compelling investment today.
I'll outline what Morgan Stanley's views and thoughts on NAB shares are below.
Positive views on the bank
According to reporting by The Australian, Morgan Stanley analysts believe NAB shares are the best way to play a 'soft landing' economic situation in Australia and a robust economic recovery in 2025.
The Morgan Stanley analysts are looking for a number of areas in the upcoming ASX bank share result, including loan growth expectations, commentary on margin drivers, the cost outlook, provision coverage, and further capital management.
In a note to clients, Morgan Stanley wrote:
A key area of focus will be expectations for FY25 mortgage growth vs system and the 'pipeline' for SME loan growth.
NAB should achieve its FY24 cost growth guidance (of around 5.6 per cent year-on-year), and we hope it will provide guidance and a productivity target for FY25.
NAB has only $0.6bn of its $3bn buyback to go, and we forecast a pro forma CET1 of around 12 per cent, so we expect it to announce an $1bn top-up to the buyback.
According to The Australian, there are a few specific things that Morgan Stanley thinks are significant.
First, the FY24 fourth-quarter profit margin is important, and the broker is estimating that it was stable quarter over quarter.
Second, drivers of the second-half margin movement could be important, with the broker forecasting the margin to be stable at 1.72%.
Third, considerations for the FY25 first half will be important to Morgan Stanley.
The final element reported by The Australian on Morgan Stanley's views is that it will monitor its commentary about credit quality trends for small and medium enterprises, pockets of stress, and the potential for provision release.
NAB share price snapshot
In the past year, the NAB share price has risen 38% compared to an increase of more than 21% for the ASX 200.
