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On Wednesday, Citi analyst Andrew Baker updated the financial outlook for NN Group NV (AS:NN (NASDAQ:NNBR):NA) (OTC:NNGPF), raising the price target to €53.90 from the previous €42.95. Despite the increase, the firm maintained a Neutral rating on the stock.
The adjustment comes after a detailed review of the company’s Capital Markets Day (CMD) and the introduction of fiscal year 2027 into Citi’s financial model. As a result of the review, Citi’s estimates for NN Group ’s net income in 2025 and 2026 have been revised upwards by 2.3% and 1.9%, respectively. The forecasts for operating capital generation (OCG) have also seen a modest uptick of 0.89% for 2025 and 1.24% for 2026. However, the free cash flow (FCF) projections remain largely unchanged.
Baker attributed the re-rating of the stock to a combination of factors, including a less volatile macroeconomic environment and more stable solvency prospects for the company. These elements are believed to contribute to smoother and more predictable cash remittances.
In light of these developments, Citi has chosen to lower its Equity risk premium assumption from 5% to 3.5%. Additionally, the business risk premium assigned to NN Group’s life business has been reduced from 1.5% to 1%. These changes underpin the decision to increase the price target while reiterating the Neutral stance on the stock.
NN Group’s share price has been gradually adjusting upward since Citi’s last update, reflecting the less turbulent macro backdrop and the firm’s solid solvency position. The updated price target of €53.90 represents Citi’s current valuation assessment based on the latest financial forecasts and risk assumptions for NN Group.
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