NatWest target hiked by UBS as profits beat forecasts

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Analysts said the UK bank’s pre-tax profit for the second quarter, reported last Friday, was “40% ahead of consensus”

() had its target price hiked to 215p from 214p by analysts at UBS, who said the UK bank’s pre-tax profits in its results for the second quarter had come in “40% ahead of consensus”.

In a note on Monday, the Swiss bank, which rates NatWest at ‘neutral’, said the profit beat had been driven by a “much larger impairment credit than expected”, adding that the company’s plans for a share buyback of up to £750mln, also announced in the results last Friday, was supported by strength in its balance sheet.

READ: NatWest proposes 3p interim dividend and £750mln share buyback as outlook improves

While analysts did say near-term estimates for loan bad debt charges had risen, longer term ones “are more stable”.

Despite this, UBS also said that it had retained its rating on the stock due to what the analysts said was “limited capital upside”, while the slightly higher target price was the result of a prediction of “slightly higher” earnings per share (EPS) for 2022.

Shares in NatWest rose 1.8% to 208.2p in late morning trading on Tuesday.

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