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FTSE 100: NatWest share price and Q1 earnings results preview

What to expect and how to trade NatWest’s upcoming results

Bank clock Source: Bloomberg

When are NatWest’s results expected?

NatWest Group PLC is set to release its first-quarter (Q1) results on 28 April 2023. The results are for the quarter ending March 2023.

What is ‘The Street’s’ expectation for the Q1 2023 results?

Expectations for the upcoming results are as follows:

Revenue of £3,781 billion : +24.91% year on year (YoY)
Earnings per share (EPS): 11.61 pence (+18.34% YoY)

NatWest shares continue their recovery

After slumping to a four-month low in March as the banking crisis engulfed markets, NatWest shares have recovered to an extent, though they remain well below the January highs.

Rising UK interest rates provided support for the share price throughout 2022, and after initial losses in Q1 the longer-term move higher from the 2020 lows around 100 pence continued.

The shares were badly shaken by the turmoil in UK financial markets back in September, when the Liz Truss government prompted a slump in the pound and other UK assets, but this proved to be a buying opportunity for NatWest (and other UK banks), and the shares promptly went on a surge from 210p to the 2023 high at 310p as a new prime minister and chancellor steadied the UK economy.

UK outlook clouded by recession fears

While recession fears have dogged markets generally, the UK economy has yet to fall into a sustained period of negative growth. This would be a potential bearish catalyst for bank stocks, and does represent a risk for NatWest shares. However, at six times earnings the stock does not look expensive.

How to trade the NatWest share price?

Refinitiv data shows a consensus analyst rating of ‘buy’ for NatWest with 4 analysts rating the company as a strong buy, 11 as a buy, 5 as a hold and 1 as a sell with the median of estimates suggesting a long-term price target of 370 pence for the share, nearly 34.5% higher than the current price (as of 20/04/2023).

Refinitov Natwest analyst ratings Source: Refinitiv

IG sentiment data shows that 87% of clients with open positions on the share (as of 20 April 2023) expect the price to rise over the near term, while 13% of clients expect the price to fall.

58% of clients who trade the share sold it this week and 69% of clients sold it this month.

IG Natwest client sentiment Source: IG

NatWest share price – technical view

The NatWest share price is gradually recovering from its 237.2p low whilst approaching the February-to-March downtrend line at 277.8p which, together with the 22 March high and 55-day single moving average (SMA) at 280.2p to 281.4p, may short-term cap.
Were a daily chart close above this resistance area to be seen, however, the August peak at 284.4p would be eyed next, followed by an advance back towards the February peak at 313.1p. En route the early March high can be spotted at 296.1p.

Natwest daily chart Source: Tradingview
Natwest daily chart Source: Tradingview

Slips should find support along the 200-day simple moving average (SMA) at 264.2p and at the 5 April low at 261.5p. Provided that this support zone underpins, further upside for the NatWest share price is likely in store.

This information has been prepared by IG, a trading name of IG Australia Pty Ltd. In addition to the disclaimer below, the material on this page does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. IG accepts no responsibility for any use that may be made of these comments and for any consequences that result. No representation or warranty is given as to the accuracy or completeness of this information. Consequently any person acting on it does so entirely at their own risk. Any research provided does not have regard to the specific investment objectives, financial situation and needs of any specific person who may receive it. It has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such is considered to be a marketing communication. Although we are not specifically constrained from dealing ahead of our recommendations we do not seek to take advantage of them before they are provided to our clients.

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