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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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While the management reiterated its full-year guidance, the third quarter results confirmed that interest rate increases also have a negative side in the form of negative equity adjustments and a looming asset quality deterioration.
Companies: Lloyds Banking Group plc
The FDA has announced it has completed the first pre-market consultation for a food product made from cultured animal cells. The submission, made by Upside Foods, and FDA response means that the agency accepts Upside's data package and conclusion that its cultivated chicken product is safe to eat. This clearly represents a significant achievement for Upside Foods and a major milestone for the cultivated meat sector in general, marking the first significant regulatory milestone in a major jurisdi
Companies: Agronomics Limited
Marlowe has released a robust set of H1/23E results, with strong organic growth (+8% YoY), improved Adj EBITDA margins (+100bps YoY to 18.8%), and confirmation that it is trading “slightly ahead” of expectations for full year Adj EBITDA. We nudge up our FY23E Adj EBITDA by £1m to £82m, leave FY24E Adj EBITDA unchanged (at £93m), but lower Adj Diluted EPS in both years (by 9% and 11% respectively), primarily to account for higher interest rates on increased borrowings (used to fund recent M&A). D
Companies: Marlowe Plc
Companies: H&T Group plc
Dish of the day
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What’s cooking in the IPO kitchen?**
Kistos Holdings plc, intends to join AIM. The Company was incorporated to act as a new holding company for the group companies 0f Kistos plc (KIST), a holding company with the objective of creating value for its investors through the acquisition and management of companies or businesses in the energy sector. Anticipated Market Cap £327m. Expected 22 Dec 2022.
AT85 Global Mid-Market Infrastr
Companies: SEE JSE MKA EAH ABDP MRL TENG KIBO
Alkemy’s 100%-owned subsidiary Tees Valley Lithium (TVL) has received full planning permission to build its planned world-class, low carbon, lithium hydroxide refining facility at the Wilton International Chemical Park in the Teesside Freeport, UK. Our indicative valuation increases to 1228p/sh (£12.28/sh) from 614p/sh previously. Details in the note...
Companies: Alkemy Capital Investments Plc
Palace Capital has released interim results to the end of September reporting adjusted profit before tax of £3.5m (1HFY22 £4.0m) and adjusted EPS of 7.9p (1HFY22 8.7p), mainly reflecting rising financing costs. The dividend was maintained at the current quarterly run rate of 3.75p and net debt was held broadly flat. EPRA NTA per share fell 8.7% to 356p. The sale of the industrial portfolio remains paused but smaller commercial sales continue together with the sale of apartments at Hudson Quarter
Companies: Palace Capital plc
Augmentum Fintech has reported stable NAV per share at 155.0p during 1H23 (flat HoH, +5% YoY). The 19.3% IRR since IPO is marginally below the Group’s 20% Internal Target Return, unsurprising given a challenging market environment. Broadly stable portfolio valuations come as particularly encouraging with underlying investee performances (100% avg. revenue growth for Top 10 assets) largely offsetting multiple compression (EV/NTM Sales from 5.7x to 4.2x). Following the realisation of AUGM’s invest
Companies: Augmentum Fintech PLC
Singer Capital Markets
Dish of the day
Looking Glass Labs (NFTX) joins the Access Segment of the AQSE Growth Market. The company is engaged in digital agency specialising in immersive XR metaverse design, non fungible token architecture and virtual asset royalty streams. Looking Glass Labs is currently listed on the NEO Exchange (Canada). Market Cap £18.8m.
EDX Medical Group joins the Access Segment of AQSE Growth Market. (Formerly TECC Capital plc) EDX operates a molecular biology and diagnostics laboratory
Companies: RUA WYN MOS VAST AEO MTPH TEK TLY ARK
Tatton is delivering strong organic growth, despite bear market conditions. In the 6 months to 30 September 2022 TAM attracted £907m of net inflows, and grew group revenue 15.1%, EPS by 12.9% and DPS by 12.5%.
Companies: Tatton Asset Management Plc
Feature article: A different kind of beat: Boyzone, 1996
Quoted company engagement with retail investors – a new world
This month's feature article has been written in collaboration with The Quoted Companies Alliance.
Retail investors used to be the second-class citizens of the stock market. The bulk of their money was held in funds or pension schemes where a professional took all the decisions and where they owned only a tiny part of the equity market directly. They also tended
Companies: OCI ICGT FAS FJV IBT APP ARBB RECI PANR TRX FCSS AVO FEV FSV STX VTA
Hardman & Co
If one looks through the current interest rate cycle and trusts that inflation will be brought under control at some point within an investable timescale, then the hope is that as the cost of capital reduces real estate values will rise again. Our worst-case scenario of a 200bps move in yields and no rental growth would see valuations fall by a third. Many of the discounts that industrial and logistics property companies are trading on are currently wider than this. Couple this with the strong o
Companies: LMP SGRO WHR ASLI EBOX BBOX SHED MLI
East Imperial produces and markets premium tonics and mixers, selling to some of the world's leading hotels, bars and restaurants in APAC, the US and other countries around the world. The company was founded in New Zealand and Singapore in 2012, with a focus on building a high-quality brand to capitalise on the growing demand for premium and ultra-premium spirits and mixers. With key competitors seeking high volume growth, including through expansion into off-trade value retailers, East Imperial
Companies: East Imperial PLC
This quarter’s key observations
• Subsector performance: UK Software was the only saving grace in the technology sector during the three months to 10 November, with an aggregate share price movement of +8.1% vs. an average of -12.0% for the other five subsectors. This was largely driven by strong performances from Microfocus International (+70%, following an announced $6bn takeover by Canadian software provider OpenText) and WANdisco (+52%, after strong interim results in September and a po
Companies: CNIC SYS BIG DEVO