The Natwest share Price is a bargain, says Deutsche Bank

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Written By: Elliott Laybourne
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  • The Natwest share price is undervalued by 35% according to the bank, which predicts strong revenue growth in 2022.

The Natwest share price is undervalued by 35%, according to the bank, which predicts strong revenue growth in 2022.

Natwest Group (LON: NWG) has gained almost 7% in the last two weeks as fears over the Omicron variant subside. NWG closed Wednesday at 221.6 p (-0.23%), around 5% below this year’s 235.1p high. Like most UK banks, Natwest struggled in November when the Bank of England shocked the market by keeping interest rates unchanged. However, analysts at Deutsche Bank expect the central bank to start tightening soon, which they say will provide a material tailwind for the Natwest share price over the next 12 months.

UK Banking Sector Poised For Growth

“UK and Irish banks have some of the best revenue momentum in Europe due to rates — and we believe this should have a higher value over time.”

Deutsche bank

The research note painted a promising picture for the health of the UK banking sector. Furthermore, the bank says Natwest has the most to gain when rates eventually rise. As a result, they upgraded Natwest to buy and lifted the price target to 300p.

NWG Price Analysis

The share price chart shows that NWG is climbing out of its recent downtrend. Furthermore, the price is above the 100 and 200-Day Moving Averages. Therefore, NWG should advance towards the 2021 high at 235.1p in the coming sessions.

In my view, the outlook is constructive as long as the Natwest share price is above the 200-DMA. On that basis, a close below 207.1p suggests a breakdown, invalidating the optimistic outlook.

Natwest Share Price Chart (Daily)

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This post was last modified on Dec 09, 2021, 03:28 GMT 03:28

Written By: Elliott Laybourne

Elliott Laybourne is an accomplished Hedge Fund sales and Investment bank trading specialist. Elliott also started a successful Base Metals Brokerage business in partnership with ABN AMRO clearing bank. He worked on the open outcry trading floors at the London International Financial Futures Exchange 'LIFFE' and the London Metal Exchange 'LME.' He also provided research and execution services for Goldman Sachs, JP Morgan, Credit Suisse, Schroders Asset Management, and Pennsylvania State Public School Employees Retirement System, as amongst others. Today, he focuses on providing trading consultancy and business development services for family office and brokerage clientele.

Published by
Written By: Elliott Laybourne