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What the analysts are saying: NAB is a Buy
Citi has changed its recommendation on National Australia Bank, calling the stock a Buy based on its share price underperformance compared with its big bank peers. NAB stock has traded about six per cent below its peers this year.
In a note to clients, Citi said: "We believe that with NAB's strengthened capital levels and continued modest asset growth, current dividend levels appear to be sustainable."
Citi has a 12-month price target of $24.50 on the stock, compared with its Friday close of $23.54 (the price was $22.81 when the note was issued).
Morgan Stanley data issued last week shows NAB's forward price-earnings multiple at 86 per cent of its peers, while ANZ's is at 96 per cent, Westpac's at 99 per cent and Commonwealth's at a premium of 116 per cent.
NAB's year-to-date total shareholder return is 4.6 per cent, compared with 10.2 per cent for ANZ, 10.8 per cent for Commonwealth and 10 per cent for Westpac.
NAB's estimated forward dividend yield is eight per cent, compared with 6.8 per cent for ANZ, 6.5 per cent for Commonwealth and eight per cent for Westpac.
