NWG:LSENatWest Group Plc Analysis
Data as of 2026-05-26 - not real-time
£596.40
Latest Price
5/10Risk
Risk Level: Medium
Executive Summary
NatWest Group plc is trading at £596.40, well below the analyst median target of £730 and the mean target of £735, indicating a material upside potential.
The stock trades at a forward P/E of 7.14 and a trailing P/E of 8.52, both substantially lower than the industry average P/E of 16.73, supporting an undervalued valuation grade.
Technical signals are mixed: the price sits above the 20‑day SMA (£573.11) and the 50‑day SMA (£575.89) and the 200‑day SMA (£586.37), while the RSI of 57.6 and a bullish MACD histogram (+2.98) suggest short‑term momentum, yet the computed trend direction is bearish and volatility is elevated at 32.62% over 30 days.
Fundamentally the bank delivers a solid 14.0% ROE, a 36.9% profit margin and a 5.56% dividend yield with a modest payout ratio of 46.6%, indicating dividend sustainability; cash (£248.5 bn) comfortably exceeds debt (£137.8 bn), and the recent Tyl‑Endava payments partnership points to growth catalysts in merchant services.
The stock trades at a forward P/E of 7.14 and a trailing P/E of 8.52, both substantially lower than the industry average P/E of 16.73, supporting an undervalued valuation grade.
Technical signals are mixed: the price sits above the 20‑day SMA (£573.11) and the 50‑day SMA (£575.89) and the 200‑day SMA (£586.37), while the RSI of 57.6 and a bullish MACD histogram (+2.98) suggest short‑term momentum, yet the computed trend direction is bearish and volatility is elevated at 32.62% over 30 days.
Fundamentally the bank delivers a solid 14.0% ROE, a 36.9% profit margin and a 5.56% dividend yield with a modest payout ratio of 46.6%, indicating dividend sustainability; cash (£248.5 bn) comfortably exceeds debt (£137.8 bn), and the recent Tyl‑Endava payments partnership points to growth catalysts in merchant services.
Market Outlook
Short Term
< 1 yearNeutral
Model confidence: 6/10
Key Factors
- price near support (£541) with limited upside before hitting resistance (£599)
- elevated 30‑day volatility (32.6%) and a max drawdown of –25.1% signal caution
- current dividend yield (5.56%) provides income buffer
Medium Term
1–3 yearsPositive
Model confidence: 7/10
Key Factors
- undervalued multiples (PE 8.5 vs industry 16.7, PB 1.22)
- robust earnings growth (revenue up 7.5% YoY, Q1 EPS 17.9p vs 15.5p prior)
- strategic Tyl‑Endava partnership expanding merchant‑payment revenues
Long Term
> 3 yearsPositive
Model confidence: 8/10
Key Factors
- strong capital position (cash £248.5bn vs debt £137.8bn, low beta 0.54)
- sustainable dividend (5.56% yield, payout 46.6%) and solid ROE (14%)
- analyst consensus ‘buy’ with target price upside ~20‑25% and low sector risk
Key Metrics & Analysis
Financial Health
Revenue Growth7.50%
Profit Margin36.88%
P/E Ratio8.5
ROE14.07%
ROA0.82%
P/B Ratio1.2
Industry P/E16.7
Technical Analysis
TrendBearish
RSI57.6
Support£541.40
Resistance£599.80
MA 20£573.11
MA 50£575.89
MA 200£586.37
MACDBullish
VolumeDecreasing
Fear & Greed Index91.13
Valuation
Target Price£735.24
Upside/Downside23.28%
GradeUndervalued
TypeBlend
Dividend Yield5.56%
Risk Assessment
Beta0.54
Volatility32.62%
Sector RiskMedium
Reg. RiskMedium
Geo RiskLow
Currency RiskLow
Liquidity RiskMedium
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This analysis may contain inaccuracies and is provided for informational and research purposes only. It is not personal investment advice, a recommendation, or an instruction to buy, sell, or hold any asset.