Nordea (Buy, TP: SEK169.00) - Buy in the buyback pause
The positive NII trend in Q1 underpins Nordea’s resilient NII outlook, where we forecast flat NII in 2025 versus 2023 despite lower rates. We expect the paused buybacks to resume by year-end, and accelerate in 2025, and that Nordea will still provide 10–11% in total yields for 2024–2026. We expect Nordea to retain an ROE above or around 15% for 2024–2026, and thus find the P/BV of c1.1x too low. We have raised our 2025e EPS by c2% and our target price to SEK169, and we 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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