Storebrand (Buy, TP: NOK106.00) - Long-term tailwinds
Q3 profit before amortisation was NOK670m, falling YOY given the turbulence in financial markets YTD. However, higher interest rates should increase the returns of company portfolios near-term. Insurance continues to benefit from strong premium growth and active repricing. Reduced volatility adjustment (VA) led to a Solvency II ratio of 174% in Q3, but recent market movements should support a return to above the 180% threshold for Q4e, prompting renewed buybacks. We reiterate our BUY and have raised our target price to NOK106 (105) on c2% higher 2023—2024e adjusted 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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