Although the National Australia Bank Ltd (ASX: NAB) share price is trading lower today, that couldn't stop it from hitting a new 52-week high of $31.84 on Friday in early trade.
When the NAB share price reached that level, it meant it was up an impressive 23% over the last 12 months.
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Can the NAB share price keep rising?
The good news for shareholders is that one leading broker believes the NAB share price still has decent upside potential.
According to a note out of Bell Potter, its analysts have retained their buy rating and lifted their price target on the bank's shares to $34.50.
This implies potential upside of almost 9% for investors over the next 12 months. And if you include the 4.3% fully franked dividend yield Bell Potter is forecasting in FY 2022, the total return on offer stretches to over 13%.
What did the broker say?
Bell Potter notes that NAB has completed its $2.5 billion on-market share buy-back and announced a further buy-back of up to $2.5 billion.
Combined with its forecast for higher net interest income, this has led to the broker increasing its earnings per share forecasts from FY 2023. The broker explained:
"NAB's cash earnings are increased by 3% from FY25e, mainly due to higher net interest income (up to 1% from FY25e) and even higher other banking income (3-12% in FY23e through to FY25e from reversion back to normalcy especially in business/private and corporate/institutional banking).
These are offset to some extent by higher credit impairment charges (by up to 15bp – previously 12bp – in FY25e). In addition to lower dividend valuation yield of 3.75% (discount rate is maintained), the price target is therefore increased by $2.00 to $34.50. NAB's Buy rating is retained."
All in all, this could make the NAB share price one to consider if you're looking for exposure to the banking sector.
