Storebrand (Buy, TP: NOK105.00) - Defying short-term headwinds
The ongoing equity market turmoil continues along with a sharp rise in interest rates, lifting the returns within the company portfolio and offsetting the softer AUM growth. We forecast a Q3 EPS of NOK1.14 and a Solvency-II ratio of 177%, lower QOQ due to the negative market movements and less support from regulatory adjustments (report due at c07:30 on 26 October). Despite short-term solvency headwinds, we still expect Storebrand to commit to the capital release strategy, as seen with the launch of the ongoing NOK500m buyback programme in Q2. We reiterate our BUY and NOK105 target price on 1–3% higher 2023–2024e EPS.Storebrand ASA is the parent company in a financial group. Co. is a provider of pension savings. Co. provides range of products within life insurance, property and casualty insurance, asset management and banking, to companies, public sector entities and private individuals. Co.'s corporate organization includes the business areas of Savings, which comprises of non-guaranteed Defined Contribution in Norway and Sweden, Asset Management and Bank products to the retail market; Insurance, which includes Co.'s risk products; Guaranteed Pensions, which includes long-term pension savings products that give customers a guaranteed rate of return; and Other.
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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