NAB has been on our radar for weeks and after the impressive result from Bendigo Bank (BEN), we believe it’s time to take our banking exposure back towards market weight. We particularly liked BEN’s leverage to higher cash rates which produced better margins across their book, and it now appears this environment will be here for longer if we believe the Fed et al over the last 24 hours. With a 12.4x estimated valuation for 2023 and a forecasted 5.4% fully franked yield NAB feels like a solid/quality exposure into 2023, with the banking sector actually enjoying some obvious tailwinds from rates which are being shown through better margins and thus earnings.
- We like NAB moving into 2023 with an initial target of ~$35.
MM is now long and bullish NAB
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