NatWest Group: Solid Profit and Revenue Beat, But Hold Rating Maintained Amid Mixed Outlook

Alvaro Serrano, an analyst from Morgan Stanley, maintained the Hold rating on NatWest Group. The associated price target is p580.00.

Alvaro Serrano’s rating is based on NatWest Group’s recent financial performance, which showed a solid underlying profit before provisions and other charges, exceeding expectations by 5%. The bank’s non-interest income was notably strong, contributing to a revenue beat, while costs were managed effectively, coming in lower than anticipated. However, despite these positive aspects, the net interest income was slightly below consensus, and there are challenges related to the deposit mix.
Additionally, while the bank’s capital position remains robust with a CET1 ratio of 13.6%, and share buybacks are in line with expectations, the guidance for return on tangible equity and revenue suggests only modest improvements. These factors, combined with the current trading valuation of NatWest, led Serrano to maintain a Hold rating, indicating a balanced view on the stock’s potential upside and risks.

Serrano covers the Financial sector, focusing on stocks such as HSBC Holdings, NatWest Group, and Barclays. According to TipRanks, Serrano has an average return of 5.9% and a 52.03% success rate on recommended stocks.

In another report released on July 25, TR | OpenAI – 4o also reiterated a Hold rating on the stock with a p544.00 price target.