The National Australia Bank Ltd (ASX: NAB) share price traded rangebound today, closing 0.22% in the red at $26.99.
NAB shares started the year well before sliding off the cliff face in June. Investors have dragged the stock from a high of $31.55 on 1 June, bringing losses to 13% in a month.
In broad market moves, the S&P/ASX 200 Financials Index (ASX: XFJ) closed down 40 basis points on Wednesday.
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Is the NAB share price about to hit back?
ASX bank shares have been beaten down in 2022 amid concerns over the sector's exposure to mortgages, rising interest rates, and the Australian property market.
Analysts at JP Morgan recently updated their modelling following NAB's completion of the Citi Australian consumer business acquisition on 1 June.
"This has driven a [less than] 1% increase to FY22E cash NPAT [net profit after tax] and ~2% increase to FY23/24 cash NPAT," the JP Morgan team said.
It has an overweight rating on the bank and prices the share at $34.50 apiece, providing around $7 upside at the time of writing. JP Morgan notes:
We have an [overweight] recommendation on NAB reflecting stronger-than-peer revenue growth prospects, likely sound cost control, leverage to rising rates, and ongoing capital management.
The stronger revenue profile reflects NAB's tilt towards small business banking, which should insulate it from ROE [return on equity] pressures in retail banking, as well as strong execution in its market leading SME [small to medium enterprise] franchise where it continues to take market share.
The broker also sees NAB's pre-provision profit growth outshining its peers, and its valuation reflects the present value of the bank's dividend stream plus a multiple of its tangible book value.
Meanwhile, 46.7% of brokers each have NAB rated as a buy and hold respectively, according to Bloomberg data. The remaining ~7% say to sell.
The consensus price target from this list is $32.23, meaning there's still room for NAB to grow should this play out.
In the last 12 months, the NAB share price has held onto a 0.97% gain, despite sliding 6.4% into the red this year to date.
