Nordea (Buy, TP: SEK157.00) - Capital distributions slowing down
With the Q4 report, Nordea raised its ROE target to >15%, but also flagged some headwinds to its capitalisation, suggesting less scope for share buybacks in 2024–2025. We have cut our 2024–2025e EPS by 1–3%, primarily on lower buybacks, and our target price to SEK157 (165). While we expect Nordea to fall just short of its 15% ROE target in 2025–2026, we still find the P/BV of just 1.2x attractive, and reiterate our BUY.Nordea Bank is a financial services group based in Sweden. Co. has three business areas: retail banking, wholesale banking, and wealth management. Retail banking conducts a full service banking operation and serves household and corporate customers in the Nordic markets as well as the Baltic countries. Wholesale banking provides banking and other financial solutions to large Nordic and international corporate, institutional and public companies. Wealth management provides investment, savings and risk management products. It also manages customers' assets and provides financial advice to individuals and institutional investors.
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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