Translation: Original published in Finnish on 2/5/2026 at 7:40 pm EET.

Sampo's Q4 report came as a disappointment to the market for the first time in a while, as guidance fell short of market expectations and overshadowed the strong Q4 result. However, we estimate that changes to the market forecast will remain minimal. We have only made marginal changes to our estimates and still expect the company to show strong earnings growth in the coming years. Although the share's valuation is tight, the strong earnings growth outlook and stable dividend stream provide sufficient expected return. We reiterate our EUR 10.0 target price with an Accumulate recommendation.

Guidance overshadowed the strong report

Sampo's insurance revenue increased by 7% to 2,188 MEUR, in line with expectations, driven by the Nordic countries. In the UK, progress was even more challenging than anticipated. The Q4 underwriting result was 364 MEUR (Q4’24: 361 MEUR), exceeding our expectations and those of the market, as the impact of storms on the result was smaller than anticipated. The combined ratio was 84.3%, an impressive performance given the storms. Profit before taxes amounted to 668 MEUR, exceeding consensus expectations. However, most of the beat came from investment income, so it is of minor significance. Overall, the Q4 result was very good again.

Sampo also updated its distribution policy. The key revision to the policy was the increased emphasis on share buybacks, though the big picture remains unchanged. The company aims to distribute 90% of its annual earnings, plus the capital released from its investments (Noba and Nexi) in the coming years.

The most significant issue in the report was the 2026 guidance, which fell short of market expectations. In our view, the root of the problem is that 2025, in particular, went "too well" for Sampo, and the slower growth in 2026 is due to strong comparison figures rather than the company's own performance. As a result, we expect changes to the consensus forecast to remain moderate.

Earnings growth outlook remains good

We have only made cosmetic changes to our forecasts following the Q4 result. We expect Sampo to be able to grow its operational EPS by about 10% on average between 2026 and 2029. The main driver is, of course, the underwriting result, and the rest comes mainly from the share series, which is reduced by the purchase of own shares.

Overall, Sampo's earnings growth is currently on a very strong footing. The company is growing rapidly on the basis of its strong digital capabilities, profitability is at an excellent level and the threat from competitive pressure has dissipated with lower interest rates. As usual, profit distribution will remain generous, and we have only fine-tuned our estimates in line with the new distribution policy.

Expected return just barely sufficient

We believe it is justified to price Sampo in line with high-quality Nordic insurance peers (P/E 16-18x). Based on the actual result, we believe that Sampo's share is fully priced, with no room for multiples to rise (P/E +18x). Consequently, Sampo's expected return must come entirely from earnings growth and dividends. We forecast an average operational EPS growth of around 10% over the next three years. In addition, investors will receive a growing dividend yield of 4%. All in all, we believe that Sampo's share is correctly priced at its current level, but the attractive earnings growth outlook, combined with steadily growing dividends, offers a sufficient expected return. While the company's earnings outlook for the coming years is undeniably very good, the current valuation sets the bar high and leaves no room for error. As already stated in our previous report, the debate surrounding the threats that self-driving cars pose to traditional insurance companies has become overly heated and is not a particular concern of ours in Sampo's case.