Svenska Handelsbanken (Buy, TP: SEK150.00) - Only the share price shows distress
Trading below book value, the SHB share price suggests an elevated risk of distress or that the bank will fail to deliver returns above its cost of equity – neither of which we see any signs in the Q1 report. Rather, it gave further evidence of its robustness, with rising ROE (>14%), close to zero loan losses, and a low share of bad loans. We have raised our 2023–2025e EPS by 2–5%, our target price to SEK150 (147), and reiterate our BUY, finding the stock substantially undervalued at a P/E below 7x.
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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