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09 Feb 2024
Arctic: Storebrand - Insurance headwinds near-term, but 2025 targets still look achievable
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Arctic: Storebrand - Insurance headwinds near-term, but 2025 targets still look achievable
- Published:
09 Feb 2024 -
Author:
Roy Tilley | Martin Schei Nilsen -
Pages:
17
STB reported a Q4 group profit of NOK 947m, 24%/19% below our estimate and consensus respectively. The miss was primarily driven by higher opex and slightly lower margins in the savings segment as well as a surprisingly weak insurance result in the quarter. We had already lowered our insurance estimates for FY24 ahead of the report, but lower them another 24% now as it will take some time for pricing measures to improve the situation. We are however fairly confident that STB will get closer to its 92% target for combined ratio in 2025 and have made minimal changes there. The FY23 DPS was relatively in line with estimates and combined with a continued pace of NOK 1.5bn in annual buybacks implies a ~7.8% total yield with further y/y growth from here. As such we still see an attractive medium- to long-term equity case in STB, but in the shorter term we don’t see any real triggers for a further re-rating. With estimates down 2-3% on the back of the report we lower our TP to NOK 101 (104) and reiterate our Hold recommendation.