The National Australia Bank Ltd (ASX: NAB) share price has been hammered lower in 2020. In fact, the bank's shares are down 31.27% since the start of the year and are underperforming the S&P/ASX 200 Index (ASX: XJO).
NAB is far from alone in falling lower this year. The coronavirus pandemic has hammered share markets around the world and sparked a bear market on the ASX.
But is the NAB share price in the buy zone or should you wait to buy this year?
Why the NAB share price could be in the buy zone
Despite falling lower, I think there's a case that the NAB is undervalued right now. The Aussie bank did report its cash earnings were down 51.4% to $1,436 million, while underlying profit fell 8.1% to 1,313 million. However, I think the bank is arguably in a better position than its 31.27% share price drop suggests.
The NAB share price has fallen in line with many of its ASX bank share peers. The Westpac Banking Corp (ASX: WBC) share price is down 33.50% after announcing a soft earnings result of its own. I think the NAB share price was arguably in a better position than Westpac prior to COVID-19 and could be a good relative value buy.
There's also the changing economic environment to consider. Australia looks to be flattening the curve and the government is now looking at winding back restrictions. That's good news for businesses and consumers, which could see fewer defaults on bank loans.
The NAB share price could be undervalued if things turn out to be better than expected. If businesses can open up and the economy picks up soon, we could see ASX shares surge higher in 2020.
Foolish takeaway
Given how closely NAB is linked to the Aussie economy, I think the NAB share price could be worth buying. Despite a bank dividend cut in 2020, I still see the banks churning out strong earnings in the decades to come. That's good news for dividend investors who are looking to buy and hold for the long-term.
