Unwarranted discount to peers
We have upgraded Gjensidige to BUY (HOLD) and raised our target price to NOK160 (NOK150) as we believe the stock is trading at an unwarranted ~15% discount to Nordic P&C peers. We expect solid Q3 EPS of NOK2.4 (results due at 07:00 CET on 26 October) and an extraordinary DPS of NOK2 to be announced in H2. As we also see upside potential from improving the international segments and higher than guided run-off gains, we see no reason for its current discount to peers.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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