Transactions, CMD and halted DPS

This week Balder, Citycon and SBB announced divestments, Public Property Invest was assigned an IG rating by Fitch, and Corem hosted its CMD. The weighted-average implied EBITDA yields on the stocks we cover are 4.45% for 2024e and 5.01% for 2025e.

Novo Nordisk AS: 1 director

Two Directors at Novo Nordisk AS bought 3,096 shares at 709.250DKK. The significance rating of the trade was 73/100. Is that information sufficient for you to make an investment decision? This report gives details of those trades and adds context and analysis to them such that you can judge whether these trading decisions are ones worth following. Included in the report is a detailed share price chart which plots discretionary trades by all the company's directors over the last two years clear...

It's all about sales momentum from here

Norwegian banks: Q3'24 outcome vs. expectations

Mixed Q3s and soft datapoint for Stockholm office market

This week, Hufvudstaden, Veidekke, Selvaag Bolig and Skanska reported Q3 results. Furthermore, Vasakronan (unlisted) reported soft vacancies and net lettings, which we consider a negative datapoint for peers such as Fabege and Hufuvdstaden. The weighted-average implied EBITDA yields on the stocks we cover are 4.33% for 2024e and 4.88% for 2025e.

Selvaag Bolig (Sell, TP: NOK30.00) - Q3 miss, Urban Property covenants

While Q3 was an expected low season, with few deliveries, EPS was below our forecast on higher costs. The POC EBIT margin also fell more than we estimated, but we expect this to improve in the coming quarters with more starts. The company said it has renegotiated the terms with Urban Property, and the NIBD/EBITDA covenant will now use the POC (NGAAP) figures (previously volatile IFRS figures), thereby removing the potential 2025 covenant breach. However, we continue to find consensus recovery ex...

Running interest payments to UP from 2025e

Novo Nordisk (Buy, TP: DKK1150.00) - Wegovy roll-out boost

Q3 LCY sales growth was in line with our expectations, while LCY operating profit fell short. Based on the implied higher rebates in Q3, we have adjusted our Wegovy and Ozempic rebate estimates, offset by ROW Wegovy stock-build. The 2024 guidance for LCY sales growth was raised to 23–27% and LCY operating profit growth to 21–27%. We reiterate our BUY and DKK1,150 target price.

Negative cost revisions saved by associates

NII in line but higher cost and losses; Positive associate revisions, muted by personnel cost; Valuation in line with fundamentals

SpareBank 1 Østlandet (Hold, TP: NOK150.00) - Non-NII tailwinds, but l...

Aided by strong trading income (including a NOK287m gain from the Fremtind/Eika merger) and fees, Q3 ROE was a strong 20.4%, despite somewhat elevated loan losses. With solid lending growth partly offset by margin pressure, ‘real NII’ rose by 0.6% QOQ. Adjusted for merger-related expenses, YOY cost inflation was 11.0%. We have raised our 2025–2026e EPS by ~1% and our target price to NOK150 (148). However, trading at a 2025e P/E of ~9.9x, we continue to find a more attractive risk/reward elsewher...

Two upgrades, an equity raise, and transactions

This week, we upgraded Balder to BUY and Sagax to HOLD following their Q3 results, Balder completed a SEK1.5bn equity raise and bought assets from a JV, while a >5% rent increase for 2025 provided a positive datapoint for rent-regulated apartments in Sweden. The weighted-average implied EBITDA yields on the stocks we cover are 4.31% for 2024e and 4.86% for 2025e.

Q3: Positive proforma revisions

Adj. proforma PTP in line with ABGSCe; Positive revisions muted by commision income and cost; Valuation is fair (HOLD)

SpareBank 1 Sør-Norge (Buy, TP: NOK160.00) - Strong final pre-merger q...

With a NOK452m gain from the merger of Fremtind and Eika Forsikring, but a NOK105m writedown in Folkeinvest and NOK64m of merger-related costs, the bank reported a strong Q3 ROE of 17.5% (13.6% adjusted). While loan losses were a somewhat elevated ~22bp, NII increased 2.4% QOQ. From an 18.3% end-Q3 pro forma CET1 ratio, it guided for a ~10bp benefit in Q4 (sale of SamSpar shares), ~40bp in Q1 (Basel IV) and another ~70bp in 2025 (IRB models). With the stock trading at a 2025e P/E of ~9.8x and lo...

Sparebank 1 SMN (Buy, TP: NOK175.00) - NII momentum

Solid NII from strong loan growth helped offset higher opex and loan losses in Q3, while the NOK452m gain from the merger of Fremtind and Eika Forsikring on 1 July helped drive Q3 ROE above 21%. Asset quality remains strong, and we expect moderate loan losses going forward. We have raised our 2025–2026e EPS by ~2% on continued NII momentum and increased our target price to NOK175 (172). We reiterate our BUY.

Quarter impacted by higher cost and losses

Adj. PTP -7% vs. ABGSCe, -1% vs cons amid cost & LLP; Stronger lending growth, but weak deposit growth; Cons. EPS chg. likely down 1-3%, stock down 1-4%

Weaker cost and lending to impact revisons

Adj. PTP -6% vs. ABGSCe, -5% vs. consenus. Higher cost lower lending to impact revisions. Cons. '24e-26e EPS chg. down 0-1%, stock down 0-2% today.

SpareBank1 Nord-Norge (Hold, TP: NOK123.00) - Strong Q3, but reduced D...

NONG reported a Q3 ROE of 32.1%, boosted by sustained core revenue tailwinds, moderate loan losses and a NOK452m gain from the Fremtind/Eika merger (still-strong 21.2% adjusted for the latter). Meanwhile, the CET1 ratio fell by ~70bp QOQ, lowering the requirement buffer to ~80bp. Thus, while we have raised our 2025–2026e EPS by ~1%, we have cut our 2024–2026e DPS by ~5–6%. Following the recent share price uptick, we find the valuation fair (2025e P/E of ~9.7x) and have downgraded to HOLD (BUY). ...

Estimates up, but distributions down

Novo Nordisk (Buy, TP: DKK1150.00) - Consensus Wegovy sales aligning

We are just below consensus on Q3e LCY sales growth, reflecting our lower Wegovy and Ozempic sales, we believe due to some contributors lacking US prescription data, or differences in rebate assumptions (we see limited risk of Q3 wholesale inventory reductions). We expect management to narrow the 2024 guidance for YOY LCY sales growth to 24–28% (from 22–28%) and LCY operating profit growth of 22–28% (20–28%). We reiterate our BUY and DKK1,150 target price.

Improve the cost guidance for towards 2027

Adj. PTP +3% vs. ABGSCe, 0% vs. cons, driven by better costs; Guide future costs growth 1-2% lower from replacing fewer FTEs; Cons. '25e-'26e EPS rev. likely up 0-2%; stock could just hold up