The NatWest share price rose by more than 2% on Friday, continuing its strong bullish trend that started last year. The NWG stock has jumped by more than 70% in the past 12 months. This has made it the best performing bank stock in the FTSE 100 index. It is followed closely by Lloyds and Barclays whose share prices have risen by more than 40%. Standard Chartered and HSBC share prices have performed worse.
NatWest stock performance
The NatWest share price has risen by more than 25% this year. This performance has been driven by the strong performance of the UK consumer and the recent actions by the Bank of England.
Recent data showed that the UK housing market has remained steady, with house prices rising to an all-time high. Mortgage growth has also risen, which is notable since NatWest is one of the biggest players in the industry. Further, the unemployment rate has remained steady while retail sales have jumped.
Meanwhile, the Bank of England recently opened the door for more bank dividends and buybacks. Analysts expect that banks like NatWest, Lloyds, and Barclays will all boost their returns to shareholders. The company received a boost recently when Fitch revised its outlook on the bank from negative to stable.
Another catalyst is that the government has been selling its stake in the company. According to the Telegraph, the government will start offloading its shares over a 12-month period. The share sale will be a loss to UK taxpayers, who bought the stock at 502p during the last financial crisis. The NatWest share price is now at 192p. So, what is the future of the NatWest share price?
NatWest Share Price forecast
The NatWest stock has made a strong recovery after it crashed to a low of 90p in 2020. Along the way, the shares have moved to the 50% Fibonacci retracement level on the weekly chart. It has also risen above the 25-day and 50-day moving averages. Still, the strength of the upward momentum seems to be waning.
Therefore, there is a possibility that the shares will turn lower in the next few months as the government unloads its 52% stake in the company. If this happens, the stock could drop to the 38.2% and 23.6% retracement levels at 171p and 140p. On the flip side, a move above 220p will invalidate this view.