Citi has reiterated its Neutral stance on DNB ASA (OTC:DNBBY) (DNB: NO) (OTC: DNHBY), maintaining a price target of NOK212.00.
The reaffirmation follows DNB ASA's deal announcement, which led to a slight uptick in the stock's value. The deal is notable for providing DNB ASA with a stronger presence outside of Norway, particularly in the sectors of asset management and private banking.
According to the financial institution's analysis, the anticipated synergies from the deal are expected to be derived more from revenue enhancements rather than cost reductions. Specific areas that are forecasted to drive revenue growth include a normalization of capital markets and expansion in asset management, coupled with strategic acquisitions.
Citi's commentary highlighted an ambitious target set by DNB ASA to achieve a greater than 150% increase in net profit relative to the 2024 run rate. This projection is inclusive of certain one-time gains.
While expressing a belief in the bank's ability to sustain its current rate of stock buybacks, Citi also suggested that the total amount of future buybacks could be contingent upon the bank's preferred capital buffer level, indicating a degree of caution regarding the exact future buyback potential.
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