Natwest has got an upgrade from analysts at US peer JP Morgan, which reckons the bank looks undervalued in a new interest rate-cutting environment.
Now one of its top picks in the European banks sector, JP Morgan says NatWest looks materially undervalued on an earnings multiple of 4.8 times for the financial year 2025.
In particular, NatWest looks attractive relative to peer Lloyds, which has benefited in the recent rate hike cycle from being a low-deposit driven net interest income geared operator.
Lloyds remains an 'underweight' call for JP Morgan, while NatWest is upgraded to ‘overweight’ from ‘neutral’.
Shares in NatWest rose 1.3% to 209.2p while Lloyds edged up 0.4% to 43.62p.