NLB Group: All work and no pay make Blaz a dull boy (BUY - initiation of coverage)
We initiate coverage of NLB Group with a BUY rating and a price target (PT) of EUR 80/share, offering upside potential of 40%. NLB is a bank with a bad history, but a successful revamp in 2013, a new management team led by Blaz Brodnjak and a supportive macro have made it into a very appealing turnaround story, in our view. Today, NLB offers the opportunity to invest in a bank with high capital ratios (a CET1 of c.17%), solid ROEs (>10%) and even more solid dividend yields (>10% per annum in 2018-21E). Its valuation is, in our view, extremely attractive, with a P/E of 6.2x and a P/BV of 0.7x on our 2019E, at discounts of 40-50% vs. its regional peers in our coverage universe.
WOOD & Company is the leading investment bank in Emerging Europe. Founded in 1991 and head-quartered in Prague, our footprint spans the region and touches investors around the globe.
A pioneer in Emerging Europe, WOOD executed many of the first CEE equity trades and landmark investment banking transactions. Our electronic trading platform was the first in the region, and remains the best. We are continually expanding our relevance and reach in these ever-evolving markets.
Our equity market share reflects our stature: 7% in Warsaw, 20% in Bucharest, 16% in Hungary, 40% in Prague and 5% in Vienna. Our distribution is unparalleled, with the largest salesforce in the region, servicing a uniquely diverse investor base.
We couple local expertise with a truly international perspective. With offices on the ground in the region, and in key financial hubs such as London and Milano, we are never far from our clients and we remain at the forefront of what’s afoot in the CEE emerging and frontier landscape.
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