ShoreCap says NatWest entering fair value territory, downgrades

(Sharecast News) - Shore Capital downgraded NatWest on Monday to 'hold' from 'buy' as it said the shares were "entering fair value territory". The broker noted that NatWest shares are up 46% year-to-date, significantly outperforming the FTSE All-Share Index up 8% and FTSE All-Share Banks Index up 18%.

"This has occurred despite the government reducing its shareholding from around 38% at the start of the year to circa 27% today, with more to come by way of a directed share buyback and possible discounted retail placing," it said.

"As a result of the re-rating, the stock is now trading at a slight premium to TNAV, while the upside to our 350p fair value is now just 9%.

"Consequently, we downgrade our recommendation to hold (from buy)."