Sampo Oyj (Hold, TP: EUR44.00) - Solvency issues and slight Q1 miss
We have lowered our 2020–2021e EPS for Sampo by ~1% after the underlying combined ratio in Q1 appeared somewhat lower than we and consensus had forecast. We have also cut our SOTP fair value and target price from EUR47 to EUR44, as a result of depreciation in the value of Nordea and a reduction in the excess capital position due to the increased capital requirement for Nordea in Sampo. We maintain our HOLD. Sampo is our preferred Nordic P&C insurers, as If… is implicitly priced at a P/E 2020e of 17x vs peers at 19-23x.Co. is the parent company of a group engaged in the provision of insurance services and the marketing and sale of insurance policies such as worker's compensation insurance, personal accident insurance, motor vehicle insurance, motor third party liability insurance, fire and other property insurance; and cargo insurance.
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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