Storebrand (Buy, TP: NOK90.00) - A step backward
We have cut our SOTP-based target price to NOK90 (95), reduced our 2019−2020e dividends and trimmed our earnings forecast in Asset Management after a disappointing Q2. Following the 5%-points Solvency II ratio miss in Q2 we now expect the first extraordinary dividend payment in 2021. Despite our estimate cuts and delayed dividends, we continue to see solid upside potential to our SOTP-based fair value of NOK90 per share. We believe much of this value should be unlocked once the extraordinary dividend payments start kicking in and dividend yields go above 10%.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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