NatWest (LSE: NWG) shares have rebounded at pace from the shock attributable to US president Donald Trump’s ‘Liberation Day’ tariffs.

When the FTSE 100 closed on 2 April, NatWest was buying and selling at 463.5p. Then Trump introduced his plan, and chaos ensured. By 9 April, the NatWest share price had slumped greater than 11% to 411p.

Motley Idiot UK urged readers to remain calm and contemplate shopping for the dip fairly than promoting in panic. It’s what we all the time do, each time there’s a panic, and just about each time it has paid off.

Timing the underside is all the time guesswork, however anybody who received fortunate and invested £10,000 close to that trough could be up 18%, based mostly on the present price of round 487p. Their £10k would now be value round £11,800.

Momentum and restoration

Earlier than Liberation Day, NatWest was fortunately rattling alongside. Measured over 12 months, its shares have surged 54%. 

Stretch that out to 5 years, and the achieve rises to round 300%. That means this isn’t only a short-term bounce however a part of a broader restoration story, accelerated partly by the federal government decreasing its stake and returning greater than 98% of the financial institution to personal arms.

Regardless of that rally, the valuation nonetheless appears to be like undemanding, with a price-to-earnings ratio of simply 9.7. Dividends are one other attraction. 

The trailing yield stands at 4.42%, whereas analysts anticipate to hit 5.92% in 2025 and 6.29% in 2026. NatWest has dedicated to returning round 50% of its income through unusual dividends from 2025, and can contemplate share buybacks too.

Q1 2025 outcomes launched on 2 Could assist the optimism. Income beat expectations, leaping 36% to £1.25bn, whereas return on tangible fairness hit a powerful 18.5%. Internet curiosity margin, a key banking revenue metric, edged up to 2.27%, whereas each lending and deposits grew. 

Dividends and buybacks

Nothing strikes in a straight line, and there are nonetheless dangers to contemplate. One other Trump tariff shock might simply inject recent volatility into international markets. 

And whereas rates of interest stay elevated in the present day, there’s no assure they’ll keep that method. If inflation eases and central banks minimize charges, NatWest’s internet curiosity margins might retreat, placing strain on income.

The primary quarter’s impairment cost of £189m additionally reminds us that defaults, whereas steady, stay a threat. 

NatWest expects to hit the higher finish of its 2025 earnings and returns steerage, however these are nonetheless solely projections. 

So what do the consultants say? The 16 analysts protecting the inventory see a median 12-month share price of simply over 361p. In the event that they’re proper, that’s an increase of round 13.7% from in the present day. Mixed with that ahead yield, the full one-year return might method 20%. But it surely’s nonetheless a forecast and comprises loads of guesswork.

An extended-term alternative

Of the 18 analysts following the inventory, a powerful 14 fee NatWest a Robust Purchase. Three say Maintain, and only one calls it a Robust Promote. I’m not in that final camp. 

Regardless of its latest sturdy run, I believe NatWest shares are nonetheless value contemplating for traders in search of a mix of dividends and long-term progress. To not make a fast revenue, however as a dependable a part of a well-balanced portfolio.