NatWest: Solid Capital Returns and Earnings Visibility but Limited Upside Justify Hold Rating

Analyst Benjamin Caven-Roberts of Goldman Sachs maintained a Hold rating on NatWest Group, reducing the price target to p680.00.

Benjamin Caven-Roberts has given his Hold rating due to a combination of factors that balance solid near-term performance with a relatively limited upside to the current share price. He expects NatWest’s fourth-quarter results to show continued growth in net interest income, supported by the structural hedge and steady deposit and loan expansion, leading to robust returns on tangible equity both for the quarter and into 2025. In addition, he anticipates a sizeable £1bn share buyback with capital ratios remaining comfortably within management’s target range, underlining the bank’s capacity to return capital while preserving balance sheet strength.

At the same time, his Hold stance reflects that much of this operational strength and capital return story appears already reflected in the valuation, with the 12‑month price target implying only modest upside from current levels. Forecasts for returns through 2026–2028 remain attractive, but he assumes some moderation of tailwinds from the structural hedge over time and a gradual slowdown in the incremental benefit it provides to earnings. The expectation that management will set medium-term ROTE targets broadly consistent with current market projections also limits the potential for positive earnings surprises. Taken together, these considerations support a neutral view on risk‑reward, leading him to maintain a Hold recommendation rather than a more decisive Buy or Sell.

In another report released on January 7, Barclays also downgraded the stock to a Hold with a p700.00 price target.

Based on the recent corporate insider activity of 114 insiders, corporate insider sentiment is negative on the stock. This means that over the past quarter there has been an increase of insiders selling their shares of NWG in relation to earlier this year.