RBC Capital Markets upgraded NatWest to ‘outperform’ from ‘sector perform’ on Thursday and lifted its price target to 240p from 190p, implying around 20% upside to the current share price.
RBC said valuation multiples do not take into account the bank’s “superior” three-year total return yield of 34% versus 20% for peers.
“We are 10% above consensus for shareholder capital return between 2021 and 2023,” it said. In addition, it noted the potential for book value and earnings upgrades from write-backs and a steeper yield curve.
