DnB Markets - SpareBank 1 SR-Bank ASA (SRBNK) Sparebank1 SR-Bank (Buy, TP: NOK78.00) - Prudent measures to preserve capital

Report

DnB Markets

Håkon Astrup

EUR 92.72 For Business Accounts Only

Sparebank1 SR-Bank (Buy, TP: NOK78.00) - Prudent measures to preserve capital

We believe the measures revealed at Q1, including a lowered growth outlook and tighter cost control, should provide capital support to absorb near-term elevated loan-loss provisions. While the outlook for 2020 profitability remains poor, loan losses should eventually come down â€“ we do not consider this reflected in the current valuation of a 2020e P/B of ~0.6x. We reiterate our BUY, and have raised our target price to NOK78 (75) following our EPS increases for 2021â€“2022e.

07/05/2020 15 EN

Underlying

SpareBank 1 SR-Bank ASA

Sparebank 1 SR Bank is a savings bank. Co.'s core activities are sales and brokering of financial products and services, as well as leasing and real estate brokering. Co. is organized in three divisions: The Retail Market Division; The Corporate Market Division; and The Capital Market Division Co. provides products and services in the fields of financing, investments, money transfers, pensions and life and non-life insurance.

See profile

NO0010631567 Oslo Bors Norway

Provider

DnB Markets

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.

See profile

Analysts

Håkon Astrup

Other Reports on these Companies

DnB Markets

Scope for continued strong earnings

Seeing support from still-high interest rates and sound fundamentals, we expect solid NII and robust asset quality to contribute to continued strong earnings generation for the banks, despite the stable and eventually falling key policy rate trajectory. Trading at an average 2025e P/E of ~8.5x (adjusted for undistributed 2023 dividends), we continue to find the valuation undemanding. We maintain a positive view on the sector and highlight SVEG as our top pick.

Free Trial

March 21, 2024 March 21, 2024 1 EN

DnB Markets

SpareBank1 SR-Bank (Buy, TP: NOK163.00) - Strong Q4, but CET1 ratio downtick

Fuelled by 7.5% QOQ NII expansion, a NOK421m gain related to SB1 Markets and further loan-loss reversals, Q4 ROE was a strong 19.7%, despite a negative contribution from SB1 Gruppen and elevated cost inflation. That said, while completing the cNOK1bn private placement and proposing a ~46% payout ratio (NOK7.5 DPS, 5.9% dividend yield), the CET1 ratio fell ~25bp QOQ, following increased deferred tax deductions. With our 2024–2025e EPS up ~1–4%, we have raised our target price to NOK163 (161). Trading at a dividend-adjusted 2025e P/E of ~7.7x, we still find the valuation attractive and reiterate...

Free Trial

February 9, 2024 February 9, 2024 1 EN

DnB Markets

Scope for further generous distributions

With repricing efforts yet to take full effect and sound fundamentals boding well for manageable loan losses, we see prospects for solid earnings generation ahead, despite likely margin pressure from high levels longer-term. Given the banks’ solid capital positions, a more moderate growth outlook, and an enhanced profitability focus in the sector, we forecast further generous shareholder distributions, with an average dividend/ buyback yield of ~8% for 2023e. At an average 2024e P/E of ~8.4x, we reiterate our positive sector view, with SRBNK and SVEG as our top sector picks.

Free Trial

December 11, 2023 December 11, 2023 1 EN

Holmen (Sell, TP: SEK370.00) - Weak earnings momentum

We consider Holmen a quality company and continue to like its shareholder-friendly strategy. However, as c50% of the 2023 EBIT was derived from the traditional paper business (for which addressable markets are shrinking), and with still-tough markets for the paperboard business and lower spot prices for electricity affecting the renewable power business, we expect earnings to decline for 2024. Given relatively rich earnings multiples, we reiterate our SELL and SEK370 target price.

Free Trial

9h / 16m 9h / 16m 1 EN

Linus Sigurdson

Linus Sigurdson

VEF (Buy, TP: SEK3.50) - Positive momentum continues

VEF wrote up its portfolio by 1% QOQ in Q1 (in USD terms). We believe the underlying portfolio performance remains healthy, and the USD10m up round in TransferGo strengthens our conviction in VEF’s NAV valuations as VC dealmaking continues to pick up after a lacklustre 2023. In light of these developments, we find the 56% discount to NAV excessive and expect a positive re-rating as VEF looks to make an exit this year. We reiterate our BUY and have raised our target price to SEK3.5 (3.4).

Free Trial

10h / 54m 10h / 54m 1 EN

Mattias Holmberg

Mattias Holmberg

Volvo (Buy, TP: SEK340.00) - Beat in softer markets

The Q1 report supported our view that underlying profitability has improved structurally (now also evident in a weaker market), and that consensus will have to come up as 2024 progresses. We reiterate our BUY and have increased our target price to SEK340 (335), having raised our 2024–2026e adj. EBIT by 7–4% – we are now 8–10% above consensus.

Free Trial

11h / 36m 11h / 36m 1 EN

Sign-up for free to access full reports immediately

Email Address*

Choose Password* ( 6 or more characters )

Due to regulatory restrictions regarding the distribution of financial research, this report is restricted to a specific region or investor type. Get access to exclusive reports by answering the questions below.

Select your country*

Get financial insights straight to your inbox

By clicking "register" you accept the Terms and Conditions & Privacy Policy

Already on ResearchPool?

Almost there...

Are you a professional investor?

Select your country

REGISTER

Create a free ResearchPool account to access full reports, get a personalised dashboard and follow providers or companies

In order to access this report please create an account.

LOGIN

Sparebank1 SR-Bank (Buy, TP: NOK78.00) - Prudent measures to preserve capital

Scope for continued strong earnings

SpareBank1 SR-Bank (Buy, TP: NOK163.00) - Strong Q4, but CET1 ratio downtick

Scope for further generous distributions

Holmen (Sell, TP: SEK370.00) - Weak earnings momentum

VEF (Buy, TP: SEK3.50) - Positive momentum continues

Volvo (Buy, TP: SEK340.00) - Beat in softer markets

Create a free ResearchPool account to access full reports, get a personalised dashboard and follow providers or companies

Sign-up for free to access full reports immediately

ResearchPool Subscriptions

Get the most out of your insights

Why subscribe?

How to subscribe

ResearchPool Subscriptions

This report is only available to subscribers

Why subscribe?

How to subscribe