It's been a great afternoon session for NatWest investors, who saw their shares rise 1.9% to a price of $13.61 per share. At these higher prices, is the company still fairly valued? If you are thinking about investing, make sure to check the company's fundamentals before making a decision.
a Decline in Expected Earnings Clouds Its Value Outlook but Priced at a Premium:
NatWest Group plc, together with its subsidiaries, provides banking and financial products and services to personal, commercial, corporate, and institutional customers in the United Kingdom and internationally. The company belongs to the Finance sector, which has an average price to earnings (P/E) ratio of 15.92 and an average price to book (P/B) ratio of 1.78. In contrast, NatWest has a trailing 12 month P/E ratio of 9.0 and a P/B ratio of 2.64.
NatWest has moved 67.0% over the last year compared to 12.3% for the S&P 500 — a difference of 54.7%. NatWest has a 52 week high of $13.61 and a 52 week low of $7.8.
Positive Cash Flows and a Highly Leveraged Balance Sheet:
| 2019 | 2020 | 2021 | 2022 | 2023 | 2024 | |
|---|---|---|---|---|---|---|
| Revenue (M) | $18,163 | $13,447 | $12,702 | $16,574 | $25,382 | $29,323 |
| Interest Income (M) | $3,328 | $2,322 | $1,699 | $2,795 | $9,977 | $13,912 |
| Operating Margins | 15% | -1% | 4% | -1% | 2% | 0% |
| Net Margins | 21% | -3% | 26% | 22% | 18% | 16% |
| Net Income (M) | $3,800 | -$434 | $3,312 | $3,595 | $4,632 | $4,811 |
| Depreciation & Amort. (M) | $1,218 | $913 | $923 | $833 | $934 | $1,058 |
| Diluted Shares (M) | 12,095 | 12,130 | 11,468 | 9,787 | 8,992 | 8,332 |
| Earnings Per Share | $0.26 | -$0.07 | $0.27 | $0.34 | $0.48 | $0.53 |
| Free Cash Flow (M) | -$3,079 | $29,095 | $53,684 | -$43,597 | -$17,438 | $1,772 |
| Total Debt (M) | $337,636 | $370,154 | $369,719 | $376,697 | $391,584 | $409,672 |
| Net Debt / EBITDA | 59.54 | 280.63 | 130.29 | 302.28 | 180.28 | 255.3 |
NatWest has weak net margins with a stable trend, positive cash flows, and a highly leveraged balance sheet.
