GJF: Upgrades Will Support Shareholder Value as Insurance Prices Stay Elevated

Analysts have increased their fair value estimate for Gjensidige Forsikring from NOK 279.83 to NOK 288.14, citing stronger profit margins and the positive impact of rising insurance prices in Norway.

Analyst Commentary

• Bullish analysts have upgraded their outlook on Gjensidige Forsikring, reflecting confidence in the company's ability to capture higher margins due to favorable developments in insurance pricing.
• Recent price target increases highlight optimism for further upside in the company's valuation, supported by strategic execution and strong market positioning in Norway.
• Growth expectations are linked to the positive impact of ongoing premium rate increases, which are considered factors for improved profitability.
• Momentum in core business segments is viewed as robust, contributing to a more constructive perspective on future earnings growth and potential shareholder value creation.

• Some analysts remain cautious and maintain Neutral ratings, indicating that despite upward revisions, uncertainty exists regarding the sustainability of elevated profit margins.
• There are concerns about the competitive landscape and the potential for increased claims that could affect long-term profitability if not managed effectively.
• Valuation multiples have risen with recent upgrades, raising questions about limited upside if profit growth slows or market dynamics change.
• A minority of analysts continue to monitor sector-wide risks that could limit the positive trend in Norwegian insurance prices over time.

What's in the News

• Gjensidige Forsikring held a Capital Markets Day to update analysts and investors on its strategy and financial outlook (Key Developments).
• Gjensidige Pensjonsforsikring has decided to discontinue its new core IT system, CoreSuite, because the solution does not adequately address business requirements. This termination will impact profit before tax for the pension business by approximately NOK 400 million in Q3 2025 (Key Developments).
• The termination of CoreSuite will not affect the Group's eligible own funds or dividend capacity under Solvency II, since own funds exclude intangible assets (Key Developments).
• Gjensidige plans to update its development strategy for the pension business to better align with evolving business and system needs in response to recent technological advancements (Key Developments).

Valuation Changes

• The Fair Value Estimate has increased from NOK 279.83 to NOK 288.14, reflecting a modest upward revision.
• The Discount Rate remains unchanged at 6.34%, indicating consistent risk assumptions.
• Revenue Growth projections have fallen significantly, from 4.25% previously to 2.55% currently.
• The Net Profit Margin has risen slightly, moving from 17.82% to 18.72%.
• The Future P/E has increased from 17.87x to 19.64x, indicating a higher valuation multiple on expected earnings.