Home Sports What’s next for NAB’s share price after falling 5% last month?

What’s next for NAB’s share price after falling 5% last month?


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The National Australia Bank Ltd (ASX: NAB) share price rose 2.14% as the market continued to rally on the back of a lower-than-expected rate hike by the Reserve Bank yesterday.

NAB shares closed at 30.51 USD. It came as S&P/ASX 200 Index (ASX: XJO) ended the session up 1.74%.

Australian reports that Evans & Partners has upgraded NAB to positive. The broker has set a 12-month price target on NAB shares of $32.

Why did NAB shares collapse in September?

As reported by my stupid colleague BerndSeptember was a bad month for the market. ASX Bank Shares were no exception.

The Commonwealth Bank of Australia (ASX: CBA) the share price in September fell by 7%. NAB shares were down 5.8% at the end of the month. Westpac Banking Corp (ASX: WBC) shares lost 4.5%. The Australia and New Zealand Banking Group Ltd (ASX: ANZ) share price fell slightly by 0.1%.

When it comes to banking stocks, ASX investors worry that higher interest rates could mean a cut in new mortgage lending and an increase in bad debt.

They wonder if this could erode the benefits of higher net interest margins (NIMs) enjoyed by banks as borrowers pay more interest on existing loans.

What are the predictions for NAB’s share price in October?

October is looking great so far, with NAB shares already up 5.9%. So, all September losses are back.

The whole market is up because the RBA seems determined to slow rate hikes for the time being.

The ASX 200 took off after yesterday’s RBA announcement 3.75% higher in its best daily performance in more than two years.

In a statement, RBA Governor Philip Lowe said it was time to slow down:

In a short time, the money rate was significantly increased. Reflecting this, the Board decided to increase the cash rate by 25 basis points this month, assessing the outlook inflation and economic growth in Australia.

So maybe it will be a 0.25% increase until we know if six months of rate hikes have reduced inflation. There is a lag between rate changes and economic impact.

What do experts think about NAB shares?

Well, Evans & Partners analyst Azib Khan predicts that NIM for large banks will average 1.93% in 2023 and 2% in 2024. He thinks that might be conservative, but it’s still good nonetheless.

According to a report in Australian Financial Review (AFR), average NIM among the Big Four banks down from about 2% five years ago to 1.77% today.

That’s good for the bank’s bottom line, and we’ll get an idea of ​​how good it is for NAB in just over a month.

NAB will report its FY22 results in November

The 2022 financial year for NAB, ANZ and Westpac ended on 30 September.

NAB plans to announce the results and the following dividends payment to shareholders on November 9.

Bank stocks usually pay good dividends. Therefore, there is a chance that some investors may buy the stock in October to prepare for the next dividend payment.

This could boost NAB’s share price if there is enough buying action. And broker Citi believes NAB shares are definitely a buy for profit.

Broker says buy NAB for profit

As my Fool colleague James reported on September 23rd, Citi upgraded shares of NAB to a buy rating with a $32.75 price target. NAB shares are trading at $29.36 at the close on Wednesday.

The broker also forecasts a dividend of $1.50 per share in FY22 and $1.85 per share in FY23.

NAB’s interim dividend for FY22 was 73 cents, so Citi expects a final dividend of 77 cents in November.

Based on NAB’s share price today, that’s entirely appropriate franked annual dividend yield 7% and 8.6%, respectively.


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