Gjensidige Forsikring (Hold, TP: NOK180.00) - Strong Q3, but not strong enough
Gjensidige reported a solid Q3, with premium growth and the combined ratio beating relatively demanding forecasts. However, the market seems to have expected more, as the share price fell 5%. With Tryg and Topdanmark having sold off 15% in recent weeks, Gjensidige’s discount to peers has narrowed materially. We reiterate our HOLD and NOK180 target price, as we consider the stock more fairly priced than peers and as we expect less-volatile earnings ahead (most of the positive effects of repricing have been seen). We have raised our 2020–2021e EPS by 1% on the solid Q3 premium growth.Gjensidige Forskring provides insurance products to private and commercial customers in Norway, Denmark, Sweden and the Baltic states. Co.'s activities are divided into six segments in addition to the asset management unit which manages Co.'s investment portfolio. The Private segment provides a range of general insurance products besides banking, savings and investment products. The Commercial segment provides a range of general insurance products to the commercial and municipality markets. Co.'s investment portfolio includes all investment funds in Co. except for investment funds in the Pension and Savings and Retail Bank segments. Co.'s other segments include Nordic and Baltics.
DNB Markets is the investment banking arm of DNB Bank ASA and is focused primarily on the Nordic region, as well as internationally on niches such as global shipping, energy and related services, and seafood. DNB Markets offers services in FICC, Equities and Investment Banking advisory from offices in Oslo, Stockholm, London, Singapore and New York. Equity research coverage is offered on c250 Nordic companies. DNB was ranked no.2 in Extel Nordic Research 2017. The DNB Markets’ Credit and FICC Macro & FX Research teams are repeatedly highly rated by Prospera Nordic Institutional Investor Surveys.
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