NLB Group: Growth and dividend combo (stays BUY)
NLB Group’s shares are up c.60% ytd, but the stock is still trading at discounts of over 30% vs. its EM and frontier peers. On our upwardly-revised 2021E forecasts, NLB trades at a P/E of 8.2x and a P/TBV of 0.7x, with a dividend yield of >8%. We believe this valuation gap is likely to close in the next 12 months, in view of the company’s convincing growth profile and its sustainable ROTE of >10%. We reiterate our BUY rating on the stock and increase our price target (PT) to EUR 100/share (from EUR 78.3/share). We see NLB’s fair value as closer to 1x P/TBV, with P/Es of 10-11x on 2021/22E.
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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