Sparebank 1 Østlandet (Buy, TP: NOK132.00) - Elevated activity and strong ROE
SPOL reported a solid 12.1% ROE in Q2, partly explained by elevated financial gains. That said, the momentum in lending growth remains strong and activity across capital-light business areas is high. Combined with a slight miss on NII, higher costs have prompted us to trim our 2022–2023e EPS by c1–2%. We reiterate our BUY and NOK132 target price, with support from what we consider an attractive 6.8% yield for the next six months, a 2022e P/E of 10.9x adjusted for the Q4e dividend, and expected earnings momentum from rising interest rates.
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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