On Wednesday, JPMorgan adjusted its outlook on DNB ASA (OTC:DNBBY) (DNB:NO) (OTC: DNHBY), increasing the price target to NOK230.00 from the previous NOK220.00 while maintaining a Neutral rating on the stock. The revision follows the company's recent acquisition and its third-quarter financial performance.
The firm's analyst highlighted the impact of DNB's recent purchase of Carnegie for approximately SEK 12 billion, noting the deal's positive effect on DNB's geographic revenue diversification and capital light fee income. These areas include asset management, wealth management, and capital markets. The inclusion of Carnegie into DNB's financial estimates is set to begin in the second half of 2025.
Despite the positive aspects of the acquisition and solid quarterly results, the analyst expressed caution due to several factors. The transaction has led to a reduction of around 120 basis points in DNB's Common Equity Tier 1 (CET1) ratio, a key measure of bank solvency. Additionally, there are concerns about the potential increase in risk weight floors for real estate in Norway, which could result in an approximate 80 basis points CET1 headwind if implemented.
The analysis also took into account the possible impacts of Basel IV regulations and the Norwegian Financial Supervisory Authority's review of the Internal Ratings-Based (IRB) model. Due to these considerations, the firm has lowered its share buyback (SBB) expectations for DNB to NOK5 billion per annum in 2025 and 2026.
Following the comprehensive review, JPMorgan concluded with an increased December 2025 price target for DNB ASA, citing the adjustments made to their earnings per share (EPS) estimates, which have increased by about 5% for the years 2024 to 2026.
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