Q4 surprised us with a very strong 83.1% CR. Price increases over the last two years combined with some favourable tailwinds mean that profitability, especially in Norway, is extremely high at the moment and we have lifted UW results 8%/7% for 2021/2022. EPS comes up 4%/3% as we lower financial returns. For 2023 we expect normalisation of profitability with an 85.5% CR, NOK 9.3 EPS and NOK 8.0 DPS. We stick to Hold but lift our TP to 205 (195).
Companies: Gjensidige Forsikring ASA
GJF reports very strong Q4 with NOK 3.86 EPS vs cons 2.79/ARCe 2.56
UW result 19%/36% ahead of ARCe/Cons driven by Private and Denmark
Proposes NOK 7.4 ordinary DPS (in line) and declares NOK 2.4 XO DPS
Shares to trade up today as both EPS and DPS came in above expectations
GJF will kick off the earnings season in our coverage space on Jan 22nd and we expect a good end to a strong year with a NOK 2.55 EPS. Unlike most of the financial sector GJF has also been given fairly free reign to distribute dividends, and assuming the company sticks to its plan to distribute excess capital we model a NOK 7.5 DPS for 2020 and a NOK 2.0 XO dividend. Our estimates for 21/22 are mostly unchanged and we stick to our Hold recommendation and NOK 195 TP.
GJF delivered another impressive quarter on underwriting as high premium growth, tailwinds on large losses/run-off gains and positive frequency trends combined. We have lifted our estimates on the back of higher expected premiums and lower claims, lifting EPS by 5%/4%/3% for 20/21/22. We also lift our target price to NOK 195 (185) and are very impressed by the performance, but continue to see limited upside potential and stick to our Hold rec.
Q3 EPS NOK 3.1 vs ARCe/Cons 2.8/2.7, ROE 15.3%
Record UW result on high premium growth and improved frequency losses
Benefits from tailwinds on run-off/large losses, but also strong underlying
UW estimates to come up 2-4%, share likely to trade higher today
Our estimates come slightly down due to lower financial returns, but we have lifted Q3 as we expect another strong quarter based on benign frequency trends and robust financial results. We model a Q3 EPS of NOK 2.75. After distributing the 2019 dividend GJF remains well capitalized, but with 2023 soon coming into focus we worry that we’ll see some estimate headwinds as the current run-off guidance only applies through 2022.
BoD decides to pay out NOK 12.25/sh (7.25 ordinary + 5.0 XO dividend)
Follows clarification from MoF last week that opened up for insurers
Equals 6.5% yield on current share price
Positive to see GJF finally being able to distribute excess cash
Expectations were high going into Q2 and GJF delivered with a NOK 3.9 EPS and a record UW result. The main positive surprise was the premium growth, which also lifts our estimates by ~3-4% for Norway while we lower our estimates for Sweden. In sum this lifts our EPS by 2% for 21/22, and we also lift our TP to NOK 185 (180). At P/E ‘21 20.6x we think quality is priced in already here and we thus stick to our Hold recommendation.
GJF reported Q2 CR of 80.1% and EPS of NOK 3.90 (ARCe 4.1, Cons 3.8)
P&L roughly in line with cons., but premiums surprise on the upside
Solvency 283%, ambition still to pay dividend as soon as possible
Solid report, estimates likely to come up 2-4% on higher premiums
We’ve increased our 2020 EPS by ~30% following a strong quarter for financial returns as well as expectations of a strong Q2 on UW (ARCe 80.1% CR). Our estimates for 2021/2022 remain relatively unchanged at NOK 9.0 and 9.1 respectively. We’ve also lowered our 2020 DPS slightly as we await more clarity from regulators, though GJF’s dividend capacity remains extremely strong. We expect a strong Q2, but stick to Hold and NOK 180 target price.
GJF reported a better UW result than expected on the back of strong premium growth. We’ve lifted our EPS estimates for 2021 by 3% as a result, while 2020 comes down 4% due to a weaker financial result than we expected. The withdrawal of the dividend proposal was a bit disappointing, but with a rock solid capital position we see it as a postponement and not a cut. GJF deservedly has a premium valuation, but it leaves limited upside in our view.
UW result 24% above cons, EPS NOK -0.96 vs ARCe/Cons at -0.67/-1.33
’19 dividend withdrawn due to uncertainty and regulatory pressure
Solvency ratio of 269% means dividend capacity remains very strong
Dividend cut a small let down, but market likely to look through for now
GJF has outperformed the market in the recent downturn and is down 4% YTD. Q1 will be an exceptionally weak quarter due to the financial returns, but apart from this we expect very low activity to lead to less claims in big product lines such as motor insurance. Our 2020 EPS comes down 28% while we keep 2021 flat. With a resilient business model, GJF offers a decent save haven now and we upgrade to Hold (Sell) with a NOK 170 (165) 12-month target price.
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TMT Investments PLC have provided a portfoloio update. We have published research on this which is attached and a snapshot of the research is below.
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