Gjensidige Downgraded to Neutral by Goldman Sachs on Slower Growth Outlook

Goldman Sachs has downgraded Norwegian insurer Gjensidige to “Neutral” from “Buy,” arguing that a slowdown in the pace of price increases leaves limited room for the company to outperform high market expectations. The investment bank also cut its 12-month price target on the stock by 9% to NOK 273 from a previous NOK 300.

Rationale for the Downgrade

The downgrade reflects Goldman's view that as claims inflation moderates, Gjensidige will have less justification for significant price hikes. While profits will continue to benefit from earlier price increases, analysts at the bank expect margin expansion to slow, bringing the insurer's growth outlook more in line with its peers.

In a note to clients on Tuesday, Goldman stated the new price target represents a 4% upside from the stock's closing price of NOK 262.40 on Monday. The firm noted that Gjensidige shares have declined approximately 14% year-to-date, attributing the underperformance to market concerns over autonomous vehicles, AI-based insurance distribution, and a Danish workers' compensation ruling.

Revised Financial Forecasts

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Reflecting the more cautious outlook, Goldman Sachs adjusted its financial models for Gjensidige. The bank's key forecast changes include:

• A reduction in its 2027-2030 earnings-per-share (EPS) estimates by an average of 2.4%.
• An increase in its 2026 EPS forecast by 8.2% to NOK 15.58, following third-quarter results that beat its estimates.
• A projected combined ratio—a key measure of insurer profitability—of 78.3% for 2027 and 78.2% for 2028.

Goldman noted that its combined ratio forecasts, along with the consensus estimates, are already comfortably ahead of Gjensidige's own management target of below 81%, suggesting positive performance is already priced into the stock. The brokerage added that it prefers Nordic peers Sampo and Alm. Brand, where it sees stronger earnings growth and more immediate catalysts.