Back where it belongs
We have downgraded our recommendation on Topdanmark from BUY to HOLD, as we believe that after its recent strong run the company is back where it belongs, trading in line with its Nordic peers at a 2018e dividend yield of 5.6% and a 2018e P/E of 16.7x. The Q2 result showed a record-strong combined ratio of 77.9%, representing a remarkable 7%-points beat versus us and consensus. We have lifted our 2018–2019 EPS estimates by ~1% on the back of the strong underwriting result, but our DKK230 target price is unchanged.
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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