Though the share has seen a significant rebound since the lows in March, we see NOFI as a solid pick for 2021. The bank is very well capitalized and when we get more certainty on dividends and/or growth we think that will improve the equity case. In addition we see upside to 2021 consensus estimates, and after lifting our EPS 5%/2% for 21/22 we are now 9%/3% above the latest published consensus. We reiterate Buy and lift our TP to NOK 95 (92).
Companies: Bank Norwegian ASA
On a very risk-off day for the market NOFI delivered what we see as a solid report given the context we are in. Though revenues dipped a bit below our expectations, the positive trend on credit quality lifted EPS in line. LTM P/E after the drop yesterday is 6.3x, and we believe that if NOFI can return to some lending growth and also begin to distribute capital to shareholders the current share price is far too low. We reiterate Buy and our NOK 92 TP.
Q3 EPS of NOK 2.63 vs ARCe/Cons 2.64/2.54. ROE 19.6%
Revenues a bit below, but made up for by lower loan losses
Update on expansion plan, Germany and Spain target markets for H2/21
Report overall fairly neutral vs expectations, but solid given the context
We expect another quarter of negative lending growth, partly offset by lower funding costs and fx tailwinds. We have only made minor changes to our estimates and expect a Q3 EPS of NOK 2.6 while FY20/21/22 comes down 0%/1%/1% to 10.2/10.0/10.8. NOFI thus continues to trade below P/E 7x and at P/B ‘20e 1.2x with an ROE that is still close to 20%. We reiterate our Buy recommendation ahead of the Q3 report on October 28th.
We had expected a Q2 rebound but underestimated the scale of it as NOFI delivered a very solid Q2 report. Though some effects (on cost and net value changes) look somewhat temporary, a 24.5% ROE is nothing to scoff at. On the back of the report we increase NII 1%, lower opex slightly and lower our loan loss estimates. Our EPS is lifted 16%/7%/5% for 20/21/22, leading us to also lift our target price to NOK 92 (85) and reiterate our Buy recommendation.
NOFI reported Q2 EPS of NOK 3.1 vs ARCe/Cons 2.5/2.3. ROE 24.5%
Stronger revenues, lower cost and normalised loan loss level
Surprisingly strong report, expect estimates to be lifted
We expect a very positive share price reaction today
The economic development in Norway (and the Nordics) in recent months has been encouraging, and though the environment remains challenging for NOFI our confidence is boosted. We still expect lending volumes to drop in 2020 vs 2019, but do expect improvement in H2/20. For Q2 we model a NOK 2.45 EPS while our FY estimates are relatively unchanged. We stick to our Buy recommendation and lift our TP to NOK 85 (80) ahead of Q2 on Aug 13th.
Ireland exploratory phase concluded, with negative outcome
CBI advises that BNOR does not advance to draft application phase now
NOFI still committed to European expansion, will review other options
Ireland move not in our estimates, but negative news nonetheless
NOFI has rebounded sharply after dropping to NOK 34 in mid-March, and after reporting a 16% ROE in Q1 despite taking NOK 620m in loan loss provisions there should be more upside here. Primarily due to lower expected growth medium term our EPS comes down 3% for 2020, while 2021 is unchanged and we model NOK 10.1 for 2022. NOFI remains well capitalized and highly profitable even now, and we reiterate our Buy rec. and NOK 80 target price.
Q1 EPS NOK 1.97, 26%/13% above ARCe/Cons at NOK 1.57/1.75. ROE 16%
Revenues held up better, loan losses marginally below
CET 1 ratio of 19.6% in line with ARCe, but well below cons. of 20.8%
A solid report given the challenging conditions in our view
We lower our 2020/2021 estimates by ~25% on higher loan loss provisions and a weaker growth outlook. Though a weaker NOK will help lending volumes in Q1 we think lower consumption (travel in particular) and a Finnish rate cap will lower growth medium term. Uncertainty remains high, but NOFI has a significant earnings buffer and a solid capital situation which should see them weather the storm. We reiterate Buy, but lower our 12-month TP to NOK 80 (113).
NOFI just announced a 5.8% Pillar 2 requirement, up from 4.2%
FSA expects a 1% mgmt buffer, down from 3% previously
In effect this means a 40bps reduced requirement despite higher Pillar 2
We see this as neutral vs our expectation, but uncertainty removed
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We see the UK Government’s Net Zero Strategy as being overall helpful but not especially definitive. Amongst our coverage group, Drax Group (DRX LN) and Velocys (VLS LN) benefit from the Humberside CCS cluster prioritisation and Velocys from SAF support. The amount of renewables is likely to boost the need for flexibility solutions where Drax, Gore Street (GSF LN) and SIMEC Atlantis (SAE LN) can benefit. Hydrogen companies ITM (ITM LN) and Powerhouse Energy (PHE LN) are likely to find support. T
Companies: ADN DRX GSF ITM NESF PHE SAE SIT STRLNG TLG VLS
The third quarter continued to enjoy record CIB revenues and loan provision recoveries. Consensus expectations have now largely aligned with our projections, thus leaving limited upside potential in our view.
Companies: Barclays PLC
Companies: Plus500 Ltd.
Updating at the end of H1, Urban Logistics REIT (“ULR”) continued to deploy capital, with 2 further transactions in the last weeks of H1 bringing the total to £103m since the last raise (£109m in Jul-21). There is a further £50m in advanced stages and a £400m pipeline beyond that. Yields are in line with expectations and assets are pregnant with active management opportunities, which ULR thrives on. The board is seeking to move to Premium List to facilitate future growth. We leave forecasts unch
Companies: Urban Logistics REIT plc
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ATOM headquartered in Leeds, focussed on the large-scale production of green hydrogen and ammonia intends to join AIM towards the end of the year. ATOME intends to be spun-out from AIM-listed President Energy Plc, an oil and gas company which has incubated and financially supported ATOME to date, by way of a dividend in specie and flotation.
Devolver Digital to join AIM, an award-winning digital video games pu
Companies: SAE HMI MNO MSMN NSCI OMG PCA
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Arrow Exploration Corp. (AIM: AXL ; TSXV: AXL) , the oil and gas exploration and production company, has conditionally raised approximately £8.8m and is due to complete its dual listing on AIM on 25 Oct. Market cap c£13.1m.
Devolver Digital to join AIM, an award-winning digital video games publisher and developer in the indie games space. Recently awarded indie 'Publisher of the Year 2021' by GamesIndustry.biz.
Companies: ZYT CIC DMTR GILD LMS MMAG PYC SMRT SBI
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Devolver Digital to join AIM, an award-winning digital video games publisher and developer in the indie games space. Recently awarded indie 'Publisher of the Year 2021' by GamesIndustry.biz. Offer TBA. Due early Nov.
Life Science REIT to join AIM raising up to £100m. This will be the first London listed real estate investment trust (REIT) focused on UK life science properties providing investors with exposure
Companies: SYS1 ARE SO4 SNG TMG TMT OHG IDE KIBO MRL
Currently, Gore Street Energy Storage Fund (GSF) primarily relies on revenue from frequency response services, including Dynamic Containment (DC), to estimate near-term returns. The dislocation in the UK power market has led to a sharp rise in returns available from energy arbitrage leaving GSF’s assets well placed to benefit from this increased volatility. In September, those of GSF’s GB storage assets that participated in the actively-traded GB power markets generated revenues that were signif
Companies: Gore Street Energy Storage Fund PLC
TMT Investments PLC have provided a portfoloio update. We have published research on this which is attached and a snapshot of the research is below.
The venture capital company investing in high-growth technology companies has moved one step closer to its first IPO driven exit. In a portfolio update announced this week TMT noted that its portfolio company Backblaze, Inc. publicly filed with the SEC on 18 October 2021. TMT currently holds a 9.97% interest in Backblaze, Inc. (pre its expected fun
Companies: TMT Investments
The quarter enjoyed record provision recoveries and strong fee income generation. The coming quarters should remain supportive. The accelerated capital accumulation enabled management to announce a new $2bn share buyback.
Companies: HSBC Holdings Plc
Anglo American (AAL LN) – On track to achieve 2021 production guidance following continuing production recovery in Q3
Antofagasta (ANTO LN) - US Forest Service proposed a 20-year ban on mining in the watershed of the Boundary Waters in Minnesota
Bushveld Minerals* (BMN LN) – BUY - Valuation 33p - Bushveld back on track with solid Q3 production and cost report
Condor Gold* (CNR LN) - Valuation 102.5p – Infill drilling completed ahead of PFS/FS at the La Mestiza Open Pit
TMC the Metals Comp
Companies: TMC ANTO BMN CNR WRES PXC RMM SHG
Marlowe has raised £50m though a placing (at 907p) to fund the £25m earnings-enhancing acquisition of EssentialSkillz, a leading compliance eLearning business, as well as to provide £25m of additional firepower for potential acquisitions. Group run-rate revenues and Adj EBITDA now stand at c£335m and c£60m respectively. We update our forecasts to reflect the transaction (no change at the Adj EPS level as the contribution from EssentialSkillz is offset by dilution from the over-raise). A T+2 EV/A
Companies: Marlowe Plc
The Board of Nippon Active Value Fund (NAVF) plans to implement a share issuance programme to raise
capital for further investment through the issue of up to 300 million Ordinary Shares or C Shares over
the next 12 months, following the publication of the necessary prospectus. NAVF is proposing to raise
further capital to pursue its proven model of activist investment in quoted Japanese companies. This
will facilitate larger holdings and accelerate the process of engaging with management. It
Companies: Nippon Active Value Fund Plc
Companies: Shaftesbury PLC
Revolution Beauty have announced the acquisition of Medichem Manufacturing Ltd, exercising a call option that was flagged at the IPO. The acquisition is Revolution’s first and provides the Group with its own fully owned and vertically integrated manufacturing facility. The deal is expected to be significantly earnings enhancing in FY23E and beyond, reflected in a 15% upgrade to our FY23E and FY24E EPS forecasts today.
Companies: Revolution Beauty Group plc