Storebrand (Buy, TP: NOK106.00) - Life is good
We forecast Q3 adj. EPS of NOK1.42 and a Solvency II ratio excluding transitional rules of 175%, helped by rising interest rates and organic capital generation. Interest-rate momentum is also taking Storebrand closer to a decade-long period of sustainable 8%+ payout yields, combined with underlying earnings growth from its capital-light business. We have lifted our 2022–2023e EPS by ~1–2% and our SOTP-based target price to NOK106 (102). We reiterate our BUY as we believe Storebrand offers an attractive mix of earnings growth and release of excess capital – at an increasingly attractive valuation, with the company transitioning towards capital-lighter business.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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