ShoreCap says NatWest entering fair value territory, downgrades
NATWEST GROUP
382.50p
16:35 07/11/24
-2.00%
-7.80p
Shore Capital downgraded NatWest on Monday to ‘hold’ from ‘buy’ as it said the shares were "entering fair value territory".
Banks
4,627.72
17:10 07/11/24
-1.10%
-51.28
FTSE 100
8,140.74
17:09 07/11/24
n/a
n/a
FTSE 350
4,495.56
17:10 07/11/24
n/a
n/a
FTSE All-Share
4,453.48
16:30 07/11/24
n/a
n/a
The broker noted that NatWest shares are up 46% year-to-date, significantly outperforming the FTSE All-Share Index up 8% and FTSE All-Share Banks Index up 18%.
"This has occurred despite the government reducing its shareholding from around 38% at the start of the year to circa 27% today, with more to come by way of a directed share buyback and possible discounted retail placing," it said.
"As a result of the re-rating, the stock is now trading at a slight premium to TNAV, while the upside to our 350p fair value is now just 9%.
"Consequently, we downgrade our recommendation to hold (from buy)."