Storebrand (Buy, TP: NOK75.00) - Interest rate shift stalls buybacks
We forecast a 20%-point QOQ decline in Storebrand’s Solvency II ratio in Q1 to 154%, implying a delayed start for the buybacks, on the ~80bp drop in the Norwegian 10-year swap rate. We have cut our 2021–2022e EPS by ~10% on lower AUM for defined contribution pensions, a lower return on Storebrand’s portfolio, and reduced profit-sharing in asset management and paid-up policies, and in turn our SOTP/share and target price to NOK75 (90). However, we reiterate our BUY on a compelling valuation, but shorter-term acknowledge Storebrand is likely to be seen as a high-beta stock.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.
Unfortunately, this report is not available for the investor type or country you selected.
Browse all ResearchPool reportsReport is subscription only.
Thank you, your report is ready.
Thank you, your report is ready.