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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Today's results include few surprises in terms of cash outcomes, which are in-line with our FY21E forecasts. These record results come despite the year being challenged by Covid-19, evidencing the resilience of Duke's operating model and royalty partners. Post-period, 4 new investments have been concluded, which should help drive cash results higher over FY22E, despite a further 2 exits from the portfolio. As the company approaches near full deployment by FY23E, we expect to see FCF p/s and DPS
Companies: Duke Royalty Limited
Altus has acquired an effective 0.418% NSR over the producing Caserones copper mine in Chile. Altus’ royalty interest was acquired for $34.1m in cash as part of a strategic 50:50 partnership with EMX Royalty Corp. The acquisition was part financed with a $29m loan facility from major shareholder, La Mancha. The royalty is immediately cash generative and Altus expects the NSR to generate post-tax royalty flows of US$3.2m pa. Caserones is a large open-pit copper porphyry in Chile, operated by JX N
Companies: Altus Strategies PLC
Agronomics has announced a follow-on investment in existing portfolio company, Formo (previously LegenDairy Foods). The company has invested €3.15m in Formo's Series A funding, and now holds c5.9% of the enlarged share capital. The fundraise has generated a 7.5x uplift for Agronomics original €1m investment (Dec-19) and values Formo at c€180m (post-money) versus c€16m post-money value following the Seed round. Formo now becomes Agronomics largest holding, c9.1% and has delivered a net uplift in
Companies: Agronomics Limited
A disappointing earnings release coupled with low transparency on the Sandringham Financial Partners acquisition have led M&G’s share price to return to its pre-crisis level. While our valuation suggests a positive recommendation considering the low point, momentum remains uncertain.
Companies: M&G Plc
NextEnergy Solar Fund’s investment in NextPower III ESG is delivering in terms of widening international exposure with NPIII following its recent project win in Spain with another in Poland. This is the first acquisition the vehicle has made in Poland and the project will be supported by a fifteen year CfD. We see NESF’s investment in NPIII ESG as delivering a diversified asset growth opportunity and so far this is proving to be the case.
Companies: Nextenergy Solar Fund
Deltic Energy has had a highly successful 2021 year-to-date, as indicated in the interim statement. The key events have been the well investment decision in March for the Pensacola Zechstein prospect and the farm-out deal with Cairn Energy (CNE.L) in August over five licences in the Carboniferous/Zechstein fairway, towards the northern margin of the Southern North Sea Basin (SNS). The farm-outs firstly with Shell in 2019 and then Cairn have validated Deltic’s strategic focus on the Carboniferous
Companies: Deltic Energy PLC
What’s new: Tatton has signed a 5 year distribution partnership with Fintel and agreed to acquire Fintel’s Verbatim Funds for £5.8m cash consideration of which £2.8m is on competition and £3.0m is subject to performance
Companies: Tatton Asset Management Plc
Tatton has acquired the Verbatim funds from Fintel for (up to) £5.8m adding £650m AuM – and pushing Tatton’s AuM through the £10bn milestone. A long term strategic partnership has also been formed allowing Tatton to market to Fintel’s significant intermediary client base. We upgrade our earnings forecasts by +4% for the part year contribution in FY22e and +11% FY23e (the first full year) – but make no assumption around the potentially material opportunity from the distribution partnership. Tatto
Bluejay Mining* (JAY LN) – Greenland agrees new economic aid with the US
Ariana Resources (AAU LN) – Further drilling results from Kepez North
CATL (CATL N) – CATL may be joining the bidding war for Millennial Lithium Corp. as Chinese firms battle for EV material supply
Condor Gold* (CNR LN) – Senior mining engineer appointed to advance La India feasibility study
Cora Gold* (CORA LN) – Interims
Galileo Resources (GLR LN) – Sale of Kalahari Copper Belt licences expected to complete next week
Companies: AAU JAY CNR CORA GLR GGP POW RRR VUL SSW
NextEnergy’s JV with storage specialist Eelpower is an important strategic development. Storage demand is set to grow if the UK is to move towards its net zero targets and the combined attributes of the JV partners make it well suited to succeed here. For NESF it opens up a new route to asset growth in our view.
NextEnergy Solar Fund (NESF), which has the ability to invest up to 10% of its gross assets in energy storage, has announced a significant step into energy storage with the establishment of a £100m joint venture partnership with one of the leading battery storage specialists, Eelpower Limited (Eelpower). The joint venture is owned 70% by NESF and 30% by Eelpower. The partnership has also announced the signing of its maiden acquisition, a 50MW standalone battery storage project, which is ready to
Exactly one year ago, the FTSE 100 closed at 5,862, having fallen 100 points on the day, the lowest point since mid-May 2020, due in part, to the strength of sterling vs US$ at $1.34. One year on, the FTSE 100 has risen to 7,119, a rise of 21%, it remains 7% below the peak in January 2020. From an international viewpoint, US and European markets continue to trade at record highs. The US Federal Reserve is close to withdrawing some of its economic support this year as inflation picks up and the e
Companies: AMYT BAG BVC BRSD CLG CML FBD GDWN INV MACF MNZS MIO NRR NSF NBI MATD PREM QFI RUA SCS STVG SUR SNX UPGS VAST VLS
Companies: Harworth Group PLC
In line interim results to 30 June 2021: reported revenue was £11.4m, down 3.4%, as a result of the trust disposals; and reported PBT was £0.9m, down 6.5% YoY also as a result of disposals as well as disappointing volumes in certain areas of new business, namely UK SIPPs and the flexible annuity product. Positively, however, higher-than-anticipated revenues came from UK workplace pensions, while recurring revenues improved, reaching 88% without the inclusion of transaction-driven income in the d
Companies: STM Group PLC
AEX Gold (AEXG LN) – Further management changes at AEX to drive development of new plan
Altus Strategies* (ALS LN) – Valuation 125p – First Caserones NSR royalty payment in respect of Q2/21 expected this month
Beowulf Mining* (BEM LN) – CEO letter to Minister Baylan regarding Kallak
Bluejay Mining* (JAY LN) – Valuation 37.7p – Interims highlight activity towards development of the Dundas ilmenite mine and other exploration
Caerus Mineral Resources (CMRS LN) – Progress report on prospective j
Companies: AEX ALS BEM JAY CMRS CORA PDL POW TYM URU CCZ IRR