NatWest Group (NWG) Surges Ahead: Analysts Back a 6.3% Upside and Long-Term Growth Potential

The financial sector has been a battleground for investors in 2025, but one name stands out for its resilience and upside potential: NatWest Group (NWG). With a Moderate Buy consensus rating, a 6.3% upside to its average price target of £556.17, and a near-perfect record of beating earnings and sales estimates, NWG is primed to deliver gains for long-term investors. Let's dissect the data and uncover why this UK banking giant could be your next high-potential investment.

The Bullish Analyst Consensus: A 6.3% Upside Isn't the Whole Story

Analysts are overwhelmingly optimistic about NWG's prospects, with 15 “Buy” ratings and just 4 “Hold” ratings in the last three months. The average 12-month price target of £556.17 represents a compelling 6.3% upside from its current price of £523.20. But the real story lies in the extremes:

• Citi's £635.00 price target (21.4% upside) reflects confidence in NWG's ability to capitalize on structural advantages, such as its £1.3 billion Q1 profit surge (up 36% YoY).
• Even the most cautious analyst, RBC Capital, sees value at £475.00—a 9% discount to current levels—highlighting NWG's resilience even in bearish scenarios.

Why Analysts Love NWG: Earnings Beasts and Sector Outperformance

NWG has earned its “Beat Machine” reputation. Over the past year, it 100% beat earnings estimates—a stark contrast to the financial sector's 59% average. Similarly, it outperformed sales forecasts 100% of the time, versus the industry's 76% rate. This consistency isn't luck—it's strategy.

Backtest the performance of NatWest Group (NWG) when 'buy condition' is positive earnings surprises and 'holding for 20 trading days', from 2020 to 2025.

Historically, this record has translated into tangible returns. A backtest of NWG's performance from 2020 to 2025 reveals that buying after positive earnings surprises and holding for 20 trading days generated an average return of 4.53%, though it also faced a maximum drawdown of -5.71%. This underscores the strategy's potential rewards and risks, aligning with analysts' emphasis on NWG's long-term resilience.

Key drivers include:
1. Cost Discipline: NWG's branch network optimization and digital transformation have slashed its cost-to-income ratio, freeing capital for growth.
2. Acquisition Power: The Sainsbury's Bank acquisition expands NWG's customer base and deposit base, shielding it from interest rate volatility.
3. Hedging Programs: NWG's proactive hedging mitigates risks from falling interest rates, a major concern for peers.

The Analysts with the Best Track Records Are Backing NWG

Not all analysts are created equal. The ones with 80%+ success rates over two years are calling the shots here:
- Berenberg Bank: 80% success rate with +67.74% average returns over one year and a +123.66% two-year return. Their “Buy” rating and price target of £635.00 signal NWG's long-term dominance.
- Barclays (Aman Rakkar): Raised his target to £620.00 (18.5% upside), citing NWG's “superior risk management” and 2025 revenue growth of 13.87%.

Risks? Yes—but NWG's Hedged Against Them

No investment is risk-free. Concerns include:
- Economic Volatility: A UK recession could strain loan portfolios.
- Interest Rate Declines: Lower rates pressure net interest margins (NIM).

However, NWG's structural hedges and £15.8 billion 2025 revenue target (up 7.3% YoY) provide a cushion. Meanwhile, the UK government's planned stake sale by June 2025—a potential volatility trigger—is already priced into the stock.

Invest Now to Capitalize on 2025–2026 Growth

The data is clear: NWG is a high-conviction long-term play. With a strong earnings beat record, a sector-leading Moderate Buy consensus, and price targets as high as £635.00, this is a stock to add now and hold for the next 12–18 months.

Act fast: With NWG already outperforming peers and analysts raising targets, the window to buy at a ~£27 discount to the average target is narrowing.

Final Verdict: NWG is a Must-Hold for Growth Investors

NatWest Group isn't just surviving—it's thriving. Backed by top analysts, a fortress balance sheet, and strategic moves like the Sainsbury's acquisition, NWG is set to outpace the financial sector's Hold consensus. With a 6.3% upside on the table and room to grow, this is a stock to buy now and ride the wave of 2025–2026 growth.

Don't miss the boat.