Edison Investment Research - Natwest Group (NWG) NatWest Group - Time for a re-rating?

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Edison Investment Research

Pedro Fonseca

NatWest Group - Time for a re-rating?

Q423 earnings demonstrated the inherent profitability and resilience of returns at NatWest Group (NWG). PBT came in 25% ahead of consensus, with beats on both revenues and impairments along with good cost control. Despite continuing normalisation of credit and assuming around two more base rate cuts in 2024 than are currently priced into the bond market, management expects to deliver a return on tangible equity (RoTE) of c 12%. On consensus estimates, the shares trade at 0.8x tangible net asset value (TNAV) and P/E of 6.4x in 2024e. Without a re-rating, the consensus 10% TNAV growth and 6.4% yield imply a 16.4% 12-month total return.

05/03/2024 1 EN

Underlying

Natwest Group

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US7800976893 New York Stock Exchange United Kingdom

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Edison Investment Research

Edison is an investment research and advisory company, with offices in North America, Europe, the Middle East and AsiaPac. The heart of Edison is our world renowned equity research platform and deep multi-sector expertise. At Edison Investment Research, our research is widely read by international investors, advisors and stakeholders. Edison Advisors leverages our core research platform to provide differentiated services including investor relations and strategic consulting.

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Analysts

Pedro Fonseca

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NatWest Group - Time for a re-rating?

Morningstar | Business Uncertainty Following Prolonged Brexit Hangs Over RBS' Near-Term Income Outlook

Morningstar | New RBS Company Report

Manx Financial Group - Termination of coverage

musicMagpie - Termination of coverage

Topps Tiles - Accelerating growth through Q125

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