NatWest Shares (LON: NWG) Up 42.10% In 2024 – Analysts Continue Support

As Natwest shares come fresh off 52 week highs, a new $1billion bond issuance is set to raise funds for the bank's operations. Closer scrutiny of the firm is warranted after 42.1% gains through 2024 put the stock up at 10 year highs, with sentiment stronger now than at any time since the 2008 banking crisis.

Bond Announcement – NatWest Group plc (NWG) announced the completion of pricing for its substantial USD 1,000,000,000 bond offering. The newly issued 8.125% Reset Perpetual Subordinated Contingent Convertible Additional Tier 1 Notes have been set to attract investors looking for high-yield opportunities.

The proceeds from this issuance are specifically earmarked for a range of corporate needs. The offering is anticipated to close on the 10th of May, 2024, with a significant portion of the funds to be directed towards bolstering the general corporate purposes of NWG. Additionally, part of the capital raised will serve to strengthen the capital base of the NWG Group and/or its subsidiaries.

In a move to comply with US regulatory standards, NWG has taken the necessary step of filing a registration statement with the U.S. Securities and Exchange Commission (SEC). This is a critical part of the process for offerings of this nature, providing investors with important disclosures about the securities on offer.

Despite the press statement's detail on the offering, NWG has emphasized that it is not an attempt to sell securities or a solicitation for offers to buy. The clarification serves to inform potential investors that the formal offer will only be made through a prospectus or similar documentation and the information here is to provide general news that can impact corporate health.

Analysts Repeatedly Get Behind NWG

The outlook for the stock more generally from the analyst community has been more favourable in recent weeks. Currently, NWG shares are sitting up at 312.90p, recent analyst upgrades have the high price target up at a lofty 390p, with the low bar all the way down at 140p. Consensus is for a 12 month price target on NWG.L a slither under 320p.

In a series of adjustments, JP Morgan recently raised their target price twice in 1 week, to make a total of 3 increases through the month of April.

First the target was pushed up 290 from 270 on April 9th, before being adjusted to 330 from 290 on 22nd April. Then to end out the month, the price target increased again to 350p (from the previous mark of 330), making a total adjustment of 80p through the month.

RBC Capital are another to have raised their forecast, increasing from 340 to 355, following Berenberg's own raise to 350 (from 325).

Whilst banking stocks are usually very well priced, the rather unique nature of Natwest being partly Government owned, with the sale being made back onto the market has given more room for volatility than most. An interesting watch.