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Publication date: November 21, 2024
NN Group is the official name of the Nationale-Nederlanden Group known to many. The media logically pays a lot of attention to exciting high-tech companies or companies that are in dire straits. NN Group slips quietly in between and looks set to become the best performing fund on the AEX this year. Reason enough to take a closer look at this company and, of course, we go into the opportunities for investors in this article.
What is NN Group?
NN Group is a financial services company headquartered in the Netherlands. It offers insurance, pension and investment management services. With a strong presence in 18 countries including Europe and Japan, NN Group is a leader in life insurance, pensions and asset management, serving both private and corporate clients.
The history of Nationale-Nederlanden dates back to 1845. In 1963 a merger took place between De Nederlanden van 1845 and Nationale Levensverzekering-Bank, leading to the creation of Nationale-Nederlanden. This merger created one of the largest financial services companies in the Netherlands.
In 1991, Nationale-Nederlanden merged with NMB Postbank, leading to the creation of the ING Group. Nationale-Nederlanden became the insurance arm of this integrated banking and insurance group. After the 2008 financial crisis and a European directive to separate banking and insurance operations, ING split off its insurance operations. In 2014, NN Group went public independently on the Amsterdam Stock Exchange (Euronext Amsterdam).
What is the current situation at NN Group?
At NN Group, there are no very exciting issues like we see at Tech Funds. This company continues to build growth in a healthy way and is neatly following its plans.
In the first half of 2024, NN Group reported strong operating capital generation of €959 million, highlighting the company's solid financial position.
On September 25, 2024, NN Group announced the sale of its Turkish operations to Zurich Türkiye. This strategic decision is in line with NN's focus on core markets and optimizing its business portfolio.
Fundamental analysts are mostly positive. In November 2024, Deutsche Bank raised the price target for NN Group from €43.00 to €49.00, with a retained buy recommendation. This adjustment reflects confidence in the company's financial health and future growth prospects.
NN Group has joined a global call to action on biodiversity, underscoring the company's commitment to sustainability and responsible investment.
What has NN Group performed in the stock market?
NN Group has performed well in the relative lee of spectacular funds. Below is the chart over the past 5 years, plotted against the AEX (Red line). NN Group fell heavily during COVID19 and suffered greatly during the period when inflation was skyrocketing. Just goes to show that even a stable company like NN Group has tough periods. During COVID19, the share price fell 50% and by 2022 it was down 40%. Things to keep in mind.
Other things to note, of course, is that NN Group's share price always comes back tremendously strong and records fantastic share price gains. For example, after the dip in mid-2023, the share price is already up 70%. Over the past 5 years, NN Group's 82% performance is almost double that of the AEX (+42%).
How did NN Group perform this year and what can we expect?
In the lee to victory. We are not at the finish line yet but there is a good chance that NN Group will be the best performing fund on the AEX in 2024.
Below is the chart of NN Group's share price in 2024, plotted against the AEX (red line).
NN Group is currently posting a 38% annual gain. The AEX got off to a very strong start this year but is handing back half of those gains and currently stands at +10%.
The expectation for the coming months for NN Group's share price according to our mathematical model is a modest correction from the current €45 to around €43 to then complete the uptrend in 2025 with a price target at €51.
Below is the chart of NN Group's share price since its independent listing on the stock exchange in 2014. The strong upward trend with the solid corrections are clearly visible. The most likely scenario is the rise to € 51, which would allow the share price to rise more than 10% further from the current level. After that, the view is uncertain and there may be a longer period in which the price could make a larger correction to the zone around €35.
Conclusion
NN Group is a fine Dutch company that shows excellent stock market performance on balance. For the near future, as far as our model is concerned, there is still an upside of over 10%. For the coming years, the expectation is that the share price can correct to around €35. This provides excellent long-term opportunities to buy back the shares at a lower price because, given the nature of the company and its historical share price performance, you may want to consider taking this stock into your portfolio.
Disclaimer: Investing involves risk. Our analysts are not financial advisors. Always consult an advisor when making financial decisions. The information and tips provided on this website are based on our analysts' own insights and experiences. They are therefore for educational purposes only.
