Sparebank 1 Nordmøre is a Norwegian regional savings bank (part of the SpareBank 1 alliance) with conservative, largely secured lending, a strong regional retail/SME position and a ~10% return on equity. The savings-bank model pairs stable net interest income with a high dividend payout.
On the ROE/P-B frame the equity is cheap — at 1.00× book against a Gordon-justified ~1.12× (ROE 10%, COE ~9.5%, g 3%), trading below 10× earnings with a high dividend. A benign Norwegian credit backdrop and rate tailwind support the ROE.
Gordon fair P/B = (10%−3%)/(9.5%−3%) ≈ 1.12×, versus the current 1.00× — ~12% upside to the formula, plus a high dividend, at <10× earnings.
Base NOK 200 (+8%) toward fair value plus dividend; bull NOK 230 (rate/credit tailwind lifts ROE and the multiple); bear NOK 160 (a Norwegian credit/housing downturn lifts loan losses).
The operating reverse-DCF (NOPAT / invested capital / WACC) does not apply to a balance-sheet business — leverage is the raw material and "net debt" is not meaningful. The equity is valued on residual income: book equity plus the present value of returns above the cost of equity, discounted at Ke; the single-stage lens is the Gordon fair price-to-book, (ROE−g)/(Ke−g). The market prices in a sustainable ROE of 9.4% vs 10.0% currently earned; at a sustained 10.0% ROE the warranted P/B is 1.08× (NOK 199/sh, +9%).
| Scenario | 24m target | Impl. ROE | Upside | Prob. | Driver |
|---|---|---|---|---|---|
| Bull | NOK 230 | 11% | +25% | 35% | Rate/credit tailwind lifts ROE + multiple |
| Base | NOK 200 | 10% | +9% | 45% | Re-rate toward Gordon P/B + dividend |
| Bear | NOK 160 | 9% | -13% | 20% | Norwegian credit/housing downturn |
| Prob-weighted | NOK 202 | — | +10% | 100% | Scenario-weighted expected value |
| Ke \ ROE | 10% | 14% | 18% | 22% | 26% | 30% | 34% |
|---|---|---|---|---|---|---|---|
| 8.00% | 260 | 408 | 556 | 704 | 853 | 1001 | 1149 |
| 8.75% | 226 | 355 | 484 | 612 | 741 | 870 | 999 |
| 9.50% (base) | 200 | 314 | 428 | 542 | 656 | 770 | 884 |
| 10.25% | 179 | 281 | 384 | 486 | 588 | 690 | 793 |
| 11.00% | 162 | 255 | 348 | 440 | 533 | 626 | 718 |
Green = fair value above the current price of NOK 183.50. For a financial the surface is dominated by cost of equity and sustainable ROE — not unit growth.
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1.00× book against a Gordon-justified ~1.12× — cheap on the frame.
A high, well-covered savings-bank dividend underpins total return.
A predominantly secured (mortgage) loan book limits credit losses.
Alliance membership provides scale in products, IT and funding.
Higher Norwegian rates support net interest income and ROE.
Sparebank 1 Nordmøre is a conservative Norwegian savings bank trading at book — below its Gordon-justified P/B — with a high dividend at under 10× earnings. BUY, modest conviction; base target NOK 200 (+8%).
A benign credit backdrop and rate tailwind support the ROE; a Norwegian housing downturn is the principal risk.
Every adjustment traces to the cited note/page in the source filing — click to open it there. Source reports archived locally.
NOPAT adjustments: Not available from structured data
Company add-backs we reject: Not available without footnote extraction
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How the mttssn view has evolved — each prior dated note is preserved.