NatWest Group PLC's (LSE:NWG) £1.24 billion buyback of shares from the Treasury exceeded Peel Hunt analysts’ expectations.
They had initially expected just £1.1 billion in buybacks for the whole of 2023; today’s announcement has forced a rethink of the broker's full-year estimates.
“We view the larger size as a positive, perhaps especially as the parliamentary elections scheduled for 4th July could delay the retail offer,” said analysts.
They now expect £1.4 billion in buybacks for the year. Coupled with a forecasted £1.34 billion in dividends, total capital returns are expected to come to £2.74 billion.
“This estimate now appears conservative and is supported by the 1Q results, which indicate that capital generation within the group remains strong,” said Peel Hunt's number crunchers. “Generally, we view the progressive elimination of the UK Government's holding as positive for the rating of the shares.”
The broker gave NatWest stock a 'buy' recommendation with a 370p price target.
Shares were changing hands for 318p at the time of writing.