NatWest Group (LSE:NWG) has just wrapped up a busy quarter, combining a fresh earnings update with confirmation that a large share buyback tranche has been fully completed. This has drawn renewed interest in the stock.
Against a backdrop of sector-wide concern about big banks, NatWest Group’s share price has eased over recent months, with a 30 day share price return of down 8.2% and a 90 day move of down 15% despite the latest buyback completion and third quarter update. The 1 year total shareholder return of 1.8% and a very large 3 year total shareholder return above 200% point to momentum that has cooled in the short term, as investors weigh forecast net interest income strains, the temporary bank surcharge and richer dividends against the current £6.0 share price, as well as the company’s own confidence in future returns.
Compare NatWest Group with a hand picked 17 high quality undervalued stocks that also combine solid cash generation, sizeable market caps and balance sheets that can weather sector wide pressure.
So is NatWest Group now a classic value case where falling sentiment and buybacks leave the shares mispriced, or does the recent slip simply reflect fair concern once the numbers are lined up against the £6.00 tag?
Most Popular Narrative: 23% Undervalued
On the analyst consensus Narrative on Simply Wall St, NatWest Group is framed as undervalued, with a fair value of £7.80 against the latest £6.00 close. That view leans heavily on fee income growth, AI driven cost control and ongoing capital returns.
Completion of the Evelyn Partners acquisition at the end of June 2026, which more than doubled NatWest Group assets under management and administration to £131b and is expected to lift group fee income by about 20%, sets up a larger mix of capital light, recurring revenue that could support earnings resilience relative to pure interest income.
Ongoing use of AI across software development and operations, including over 40% of code written by AI, rapid product delivery by small human and AI teams, and around 100,000 hours of front line capacity freed each year, provides a path for NatWest Group to push the cost to income ratio below the current mid 40s level and support net margins.
See why 133 investors see NatWest Group as 23% undervalued.
Result: Fair Value of £7.80 (UNDERVALUED)
Still, the narrative around NatWest Group depends on fee growth and cost savings helping to offset pressure from flattening net interest margins and rising wholesale funding needs.
Find out about the key risks to this NatWest Group narrative.
Next Steps
Mixed signals around NatWest Group can be confusing. Treat this as your prompt to move fast, review both sides of the story and weigh the 4 key rewards and 3 important warning signs.
Looking for more NatWest Group sized opportunities?
If NatWest Group has sharpened your focus on valuation, do not stop here. Broader ideas from the Simply Wall St screener can help round out your watchlist.
Use these curated sets of stocks as a starting point, then pressure test each idea against your own risk tolerance, time horizon and income needs.
- Target resilient balance sheets by reviewing a list of solid balance sheet and fundamentals (9 results) that can help anchor your portfolio when conditions get choppy.
- Hunt for mispriced quality with a 5 high quality undiscovered gems that could sit off the usual radar yet still show strong fundamentals.
- Prioritise stability and cash returns through a 4 dividend fortresses that focuses on higher yielding companies with potential staying power.
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