Storebrand (Buy, TP: NOK109.00) - NOK1bn in H2 2023e buybacks
Storebrand reported cash earnings before amortisation of NOK777m in Q2, up 33% YOY, driven in large part by the increased return on the company portfolio, which helped offset a soft YOY Insurance trend. The Insurance segment experienced increased frequency and claims inflation, contributing to an 8%-points YOY rise in the combined ratio. Price hikes have already been initiated, although the effect might linger into 2024. As Solvency reached 196%, the company has secured approval for a NOK1bn buyback programme. We have lowered our 2024e EPS by c2%, but reiterate our BUY and NOK109 target price.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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