DNB (No_rec, TP: NOK) - ROE and fee income targets raised

At its 2024 CMD, DNB raised its ROE target from >13% to >14% for 2025–2027. Targeting a CET1 ratio of >16.7% (supervisory expectation), the bank kept its dividend policy of nominally increasing cash dividends, a >50% payout ratio and share buybacks to optimise its capital position. While it continues to target 3–4% annual lending growth and a 9% (previously 4–5%).

CMD: ROE target upped to >14%

Heads-up for CMD 19 November

The weekly navigator

From the past week, we highlight: 1) Kinnevik seeks a buyback mandate and proposes two new board members ahead of its EGM; 2) we met VEF’s and Creditas’ CEOs in Stockholm; and 3) Flerie is set to present at our Healthcare Conference in Oslo next week.

Star Bulk (Hold, TP: USD20.20) - Coming challenges mostly priced in

We still see downward pressure on rates and asset values due to the imbalance between China’s underlying raw materials demand and its imports. On our 2025e spot rates and historical valuation multiples, we see 23% downside risk to current 5-year-old Capesize values, and even more for its Supramaxes. Still, we find the share price should be covered even in the event of a 25% drop in asset values. Hence, we have upgraded to HOLD (SELL) and raised our target price to USD20.2 (19.3).

Subsea 7 (Buy, TP: NOK260.00) - All eyes on 2025 guidance

We are in line with consensus on Q3e adj. EBITDA and expect 2025 revenue guidance to be the key focus (margin guidance already provided). Our 2025e revenue of USD7.1bn is in line with consensus, with YOY growth supported by an already-secured backlog (69% backlog coverage versus 55% historically), higher dayrates for its PLSVs, and two new fleet additions in 2025. We reiterate our BUY and NOK260 target price.