Shares
of
Nordea
Bank
,
the
Finnish
lender,
have
been
labeled
“too
cheap
to
ignore”
by
investment
bank
Berenberg.
Nordea
,
founded
in
1820
and
headquartered
in
Helsinki,
has
millions
of
customers
throughout
Finland,
Sweden,
Norway,
and
Denmark.
The
stock
is
also
traded
in
the
U.S.,
U.K.
,
Germany
,
Italy
and
Switzerland
.
Earlier
this
week,
the
bank
reported
first-half
results,
with
net
profit
rising
to 2.66 billion
euros ($2.89 billion),
up
from 2.48 billion
euros
in
the
previous
year.
Net
interest
income
–
earned
through
the
differences
in
rates
offered
to
savers
and
borrowers
—
grew
7%
year-on-year
to
3.86
billion
euros.
These
robust
figures
come
despite
ongoing
macroeconomic
uncertainties
and
a
challenging
geopolitical
climate,
according
to
the
bank.
“Our
results
show
that
despite
the
slow
economy,
we
continue
to
make
good
progress
on
our
strategic
priorities
and
deliver
industry-leading
financial
performance,”
said
Frank
Vang-Jensen,
chief
executive
of
Nordea.
According
to
Berenberg’s
analyst,
the
strong
fundamentals
make
Nordea
an
attractive
investment
opportunity
with
27%
upside
potential.
“Nordea’s
attractive
fundamental
characteristics
become
even
more
compelling
as
its
price-to-earnings
premium
to
the
sector
narrows,
in
our
view,”
said
Hugh
Moorhead
in
a
note
to
clients
on
July
16.
Moorhead
maintains
a
“buy”
rating
on
Nordea,
but
lowered
its
price
target
slightly
to
156
Swedish
kronor
($14.67)
from
157
kronor.
“Trading
on
only
7.5x
our
[financial
year]
2025
earnings
—
an
8%
premium
to
the
sector
—
we
think
Nordea
is
too
cheap
to
ignore.
Buy,”
Moorhead
added.
NRDBY
5Y
line
As
central
banks
in
three
of
Nordea’s
four
home
markets
have
begun
cutting
interest
rates,
with
further
reductions
anticipated,
the
stock
has
underperformed
in
2024,
falling
by
2%.
Banks
typically
make
less
money
in
a
lower
interest
rate
environment.
However,
the
Berenberg
analyst
believes
that
Nordea’s
net
interest
income
is
relatively
resilient,
noting
that
“the
market
still
underappreciates
Nordea’s
[net
interest
income]
stability,
in
our
view,
which
contrasts
favourably
to
that
of
more
rate-sensitive
Nordic
peers.”
The
analyst
also
said
that
recent
challenges,
including
a
slight
miss
on
second-quarter
net
interest
income
expectations
or
a
modest
cost
increase,
should
not
deter
investors.
In
addition,
Moorhead
holds
a
positive
view
on
Nordea’s
long-term
shareholder
distributions
despite
the
bank’s
plan
to
delay
share
buybacks
until
2025.
The
analyst
projects
11%
to
12%
annual
total
yield,
beating
the
sector
average.
The
stock
also
trades
with
a
9%
forward
dividend
yield.
