Earnings GrowthThe expected completion of the Sainsbury's Bank deal is a key driver of earnings upgrades, with potential for further upside if NatWest successfully engages its 1 million new customers.
Strategic AcquisitionNatWest's acquisition of Sainsbury's Bank balance sheet is viewed as a good strategic fit, enhancing profitability without significantly impacting the ongoing 11-12% yield.
Valuation And Government StakeThe valuation of NatWest shares is considered attractive, with a sustainable mid-teens return on tangible equity and a double-digit yield, making it undervalued at a price-earnings ratio of 7.6x.