Danske Bank (Buy, TP: DKK210.00) - Ambitious 2026 targets
In its investor update, Danske Bank presented 2026 targets of a 13% ROE, ~45% cost/income ratio and >16% CET1 ratio. Moreover, it sees a 2023–2026 dividend potential of >DKK50bn based on the upper end of its reiterated 40–60% dividend policy and plans to restart dividend payments with its Q2 report. We have raised our 2024–2025e EPS by ~4–10%, as well as our dividend forecasts, leaving ROEs of ~11–12%. In turn, we have increased our target price to DKK210 (199). With the stock trading at a ~20% discount to 2023e BV, we still find the valuation attractive and reiterate our BUY.Danske Bank is a diversified financial services firm. Through its subsidiaries, Co.'s activities include the provision of banking, mortgage finance, insurance, real estate brokerage, asset masnagement and trading in fixed income products, foreign exchange and equities. Co. operates international retail bank operations in 15 countries, with an emphasis in the Nordic region. Co. divides its operations into five segments: Banking Activities, Danske Markets, Danske Capital, Danica Pension and Other Activities. As of Dec 31 2011, Co. had total assets of DKK3,424,403,000,000 and total deposits of DKK848,994,000,000.
DNB Markets is the investment banking arm of DNB Bank ASA and is focused primarily on the Nordic region, as well as internationally on niches such as global shipping, energy and related services, and seafood. DNB Markets offers services in FICC, Equities and Investment Banking advisory from offices in Oslo, Stockholm, London, Singapore and New York. Equity research coverage is offered on c250 Nordic companies. DNB was ranked no.2 in Extel Nordic Research 2017. The DNB Markets’ Credit and FICC Macro & FX Research teams are repeatedly highly rated by Prospera Nordic Institutional Investor Surveys.
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