National Australia Bank's 1H cash profit aligned with the consensus forecast, and the 84cps interim dividend matched Morgan Stanley's forecast.

The headline net interest margin (NIM) and impairment charges were better than the broker forecast. It's felt management's outlook commentary was encouraging and balance sheet settings remain strong.

Management retained FY24 expense growth guidance. The analysts think company commentary implies the margin will be flat-to-down in the 2H.

Morgan Stanley's Equal-weight rating is maintained given a full valuation and a modest EPS growth outlook. The target rises to $31.50 from $30.60. Industry View: In-Line.

Sector: Banks.

Target price is $31.50.Current Price is $34.28. Difference: ($2.78) - (brackets indicate current price is over target). If NAB meets the Morgan Stanley target it will return approximately -9% (excluding dividends, fees and charges - negative figures indicate an expected loss).

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