Morgans retains its Hold rating and $27.50 target price after third quarter unaudited cash earnings of $1.70bn was announced. There was a credit impairment benefit, with the collective provision coverage of credit risk weighted assets declining -13bps over the quarter.
The broker reduces its FY21 forecast cash EPS by -3% due to a softer-than-expected Markets & Treasury outcome, and after assuming no further provision release in the fourth quarter.
The net interest margin (NIM) increased modestly with lower deposit and funding costs partly offset by the impact of low interest rates combined with home lending competition and mix. This outcome was slightly better than the analyst had forecast.
Sector: Banks.
Target price is $27.50.Current Price is $27.27. Difference: $0.23 – (brackets indicate current price is over target). If NAB meets the Morgans target it will return approximately 1% (excluding dividends, fees and charges – negative figures indicate an expected loss).
