NatWest Group’s Fair Value Estimate Revised Upwards to 480p
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In a recent stock note, Morningstar Equity Research announced that it has revised its fair value estimate for NatWest Group (NWG) upwards to 480p, citing a significantly better net interest margin performance and a continuously improving net interest income outlook.
According to Morningstar, the revision in fair value estimate is primarily due to the fact that base-rate cuts have been less frequent than anticipated, and swap rates have held relatively stable. As a result, NatWest’s loan portfolio has been rolling on to higher rates. Based on current swap rates, this effect is expected to continue into 2027.
As stated by Morningstar, “We had previously assumed that weakening deposit margins brought about by multiple base-rate cuts would more than negate the positive structural hedge effect. However, the opposite has been the case.” The financial services company now assumes net interest margins to expand to 240 basis points in 2027 from 213 basis points in 2024.
The current Morningstar rating for NatWest Group is 3 stars, indicating that the stock is considered to be fairly valued. The company’s economic moat rating is listed as “None”, and its uncertainty rating is medium.
Morningstar analysts have created an interactive line chart to illustrate the relationship between NatWest Group’s stock price and the firm’s fair value estimate. This chart can be accessed here.
The upgrade in fair value estimate is a positive development for NatWest Group investors. As Morningstar notes, “The author or authors do not own shares in any securities mentioned in this article.” The firm’s editorial policies can be found on its website.
It is essential to note that the information contained within this article is for educational and informational purposes only. It is not intended to be considered an invitation or inducement to buy or sell a security or securities noted within. Investors should not view this article as a personalised recommendation and should consult with a financial professional before making an investment decision.
The Key Metrics for NatWest Group
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The following metrics are crucial in understanding NatWest Group’s current standing:
* Fair Value Estimate: 480p
* Morningstar Rating:
* Morningstar Economic Moat Rating: None
* Morningstar Uncertainty Rating: Medium
These metrics provide valuable insights for investors considering NatWest Group as a potential investment opportunity.
In conclusion, Morningstar’s revised fair value estimate for NatWest Group reflects the company’s improved net interest margin performance and net interest income outlook. As the financial services sector continues to evolve, investors will be closely monitoring NatWest Group’s progress and adjusting their investment strategies accordingly.
This article is based on a stock note by Morningstar Equity Research, which can be accessed on the firm’s website.
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