Svenska Handelsbanken (Buy, TP: SEK115.00) - Patience required
Despite the disappointing removal of the previous cost target for 2022, we remain confident the bank is taking the right actions to improve profitability, including the planned divestments of operations in Denmark and Finland. We have trimmed our 2022–2023e EPS by 1–2% on reduced NII and higher costs, and our target price to SEK115 (118). However, we believe the stock remains attractively valued at a 2022e P/E below 11x, given the low-risk profile, strong long-term track record, our expectation of capital distributions and potential for efficiency improvements, and reiterate our BUY.
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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