Skip to Content

NatWest Group PLC NWG

Morningstar Rating
GBX 328.40 +1.70 (0.52%)
View Full Chart
Unlock our analysis with Morningstar Investor

Company Report

NatWest: We Lift Our Fair Value Estimate and Award a Standard Capital Allocation Rating

After taking a fresh look at our model for NatWest, we increase our fair value estimate to GBX 360 per share from GBX 280 previously. The largest change in our assumptions has been our modelling of NatWest's net interest margin. While we previously assumed that NIM may have peaked in 2023 with a subsequent slow decline, we now believe that the structural hedge income at current swap rates will be able to more than offset potential headwinds on margins. The first quarter this year already displayed a material slowing of headwinds weighing on NIMs, a trend we foresee to continue over the coming quarters. We do, however, expect lower base rates set by the Bank of England to weigh on deposit margins in the second half of 2024 through 2025. As a result, we now model for a banking NIM of 300 basis points by 2027 after a trough of 285 basis points in 2025. Moreover, NatWest can comfortably maintain a 40% dividend payout ratio while also returning GBP 3.3 billion in share buybacks over the next three years while maintaining its common equity Tier 1 ratio within its target range between 13% and 14%. Our no economic moat rating is unchanged.

Price vs Fair Value

NWG is trading at a 88% premium.
Price
GBX 328.40
Fair Value
GBX 512.00
Uncertainty
Medium
1-Star Price
GBX 128.00
5-Star Price
GBX 413.00
Economic Moat
Jshq
Capital Allocation
Bxdfxnc

Bulls Say, Bears Say

Bulls

NatWest operates a strong retail and commercial banking franchise in the U.K.

Bears

NatWest's net interest margin has likely peaked.

Is it the right time to buy, sell, or hold?
Start a free trial of Morningstar Investor to unlock exclusive ratings and continuous analyst coverage to help you decide if NWG is a good fit for your portfolio.

News

Trading Information

Previous Close Price
GBX 326.70
Day Range
GBX 325.60331.00
52-Week Range
GBX 168.00332.70
Bid/Ask
GBX 300.00 / GBX 330.00
Market Cap
GBX 2.73 Tril
Volume/Avg
13.0 Mil / 31.3 Mil

Key Statistics

Price/Earnings (Normalized)
5.94
Price/Sales
2.05
Dividend Yield (Trailing)
5.18%
Dividend Yield (Forward)
5.18%
Total Yield
14.04%

Company Profile

NatWest Group derives around 90% of its total income from the United Kingdom. The bank operates a retail, commercial, and private bank in the U.K., offering clients lending and payment services as well as asset management services.
Sector
Financial Services
Industry
Banks - Regional
Stock Style Box
Large Value
Total Number of Employees
61,800

Competitors

Valuation

Metric
NWG
BCS
LYG
Price/Earnings (Normalized)
5.946.628.06
Price/Book Value
0.840.610.80
Price/Sales
2.051.502.06
Price/Cash Flow
4.351.833.62
Price/Earnings
NWG
BCS
LYG

Financial Strength

Metric
NWG
BCS
LYG
Quick Ratio
Current Ratio
Interest Coverage
Quick Ratio
No chart available

Profitability

Metric
NWG
BCS
LYG
Return on Assets (Normalized)
1.99%0.42%0.87%
Return on Equity (Normalized)
42.62%11.47%16.66%
Return on Invested Capital (Normalized)
Return on Assets
NWG
BCS
LYG
See how this stock stacks up to its competitors with Morningstar Investor

Banks - Regional Industry Comparables

1-Day Chart
Name
Price
Morningstar Rating for Stocks
Capital Allocation
Economic Moat
Market Cap
BNP Paribas ADR
BNPQY
JshnxhwytSfdvv$77.7 Bil
Intesa Sanpaolo ADR
ISNPY
NtzdkvgtymKkvqk$71.7 Bil
PNC Financial Services Group Inc
PNC
KfjdftzwWxlhhs$71.4 Bil
U.S. Bancorp
USB
NbtjscljXktq$70.6 Bil
Truist Financial Corp
TFC
RzmgmbmtQzwgqqj$57.7 Bil
Itau Unibanco Holding SA ADR
ITUB
NhrqkgjTsw$57.2 Bil
Mizuho Financial Group Inc ADR
MFG
QgqlpkfsZjvz$55.3 Bil
Lloyds Banking Group PLC ADR
LYG
CfjfxzyhWmfrlw$47.5 Bil
NatWest Group PLC ADR
NWG
JwmrqcztwVcqwt$35.4 Bil
Deutsche Bank AG
DB
GpxvLxrcp$32.8 Bil

Sponsor Center