Translation: Original published in Finnish on 9/24/2026 at 9:36 pm EEST.

Sampo's share has fallen since the Q2 report, driven by Solidium's share sales. In our view, there have been no significant changes to the company's outlook, and the earnings growth outlook for the coming years remains robust. We therefore consider the decline to be unwarranted and are upgrading our recommendation for Sampo to Buy (was Accumulate) with a target price of EUR 10.5. We believe that the strong earnings growth outlook, secure and growing dividend, and moderate valuation create an attractive expected return at the current share price.

Sales by the state are not representative of Sampo's outlook

Sampo's share price fell significantly this week when Solidium sold 70 million shares at EUR 9.00 each. Solidium's sale was driven by its own financing needs and should not be interpreted as a strong stance on Sampo's current valuation or outlook. We would like to mention that the Finnish state has sold Sampo shares several times over the years, and, in retrospect, the timing of these sales has not been particularly successful. In addition, Sampo is not a strategic investment for the state at any level. The recent rise in interest rates and renewed AI-related concerns about the insurance sector in the United States have also slightly weighed on the shares of Sampo and other Nordic insurers.

Earnings growth outlook for the coming years remains unchanged

Our forecast changes remain marginal. Due to rising interest rates, Sampo's investment income in Q3 will be lower than before. However, we note that this is largely a technical change and that there have been no changes to the operational earnings estimates. Overall, we have decreased our earnings estimate for 2026 by around two percent, but our estimates from 2027 onwards remain unchanged. We expect Sampo to be able to grow its operational EPS by ~10% on average between 2026 and 2029. The main driver is the underwriting result, which is supported by growth in insurance revenue and Topdanmark synergies. The rest of the earnings growth comes from the reduced number of shares due to share repurchases. As usual, profit distribution will remain generous, with Sampo distributing nearly all of its profits as dividends. The backbone of the profit distribution is a steadily growing dividend, and the company also buys back its own shares for significant amounts annually. Overall, the combined total of dividends and share buybacks relative to the current share price will amount to around 7% per year in the coming years.

Expected return is starting to reach a very attractive level

We believe it is justified to price Sampo in line with its high-quality Nordic insurance peers, whose P/E ratios have hovered around 16–18x since the end of the zero-interest-rate era. Although the quality of Sampo's Nordic operations would warrant a premium valuation, the clearly lower valuation level of Hastings weighs on it. Based on estimates for 2026, Sampo's P/E ratio appears high (20x), but this is solely due to weak investment income. Based on normalized investment income in 2027, the P/E multiple decreases to below 15x, which is a low level for Sampo and below what we consider to be acceptable. We also see cautious upside in Sampo's valuation for the first time in a long time, which, together with an earnings growth of around 10% and a dividend yield of over 4%, forms a very attractive expected return indeed. Sampo will host an investor update in November, a sort of mini-CMD, where the company intends to outline its targets for the next strategy period. Historically, Sampo’s strategy events have been very impressive, bolstering market confidence in the company and its outlook. We’ll take a closer look at the outlook for the day in our preview commentary in November, but we believe the stock will find support in improved visibility once again.