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Investing.com -- Bank of America (BofA) downgraded Sampo (HE:SAMPO) shares to Neutral from Buy, citing limited upside after a 26% year-to-date (YTD) rally in the stock.
The bank lifted its price objective to €10.2 from €10.0 but sees only 7% total return potential from current levels.
“Sampo shares are up 26% this year, and after increasing our price objective (PO) by 2% to €10.2, we now see only 7% total return potential, so we downgrade the stock to Neutral from Buy,” analysts led by David Barma said in a note.
The analysts acknowledged the company’s strong execution across its segments, particularly in the Nordics, where the underwriting result in Q2 came in 3% above consensus.
Looking ahead, BofA expects this strength to continue, modeling a 13% top-line increase in 2025 and a combined ratio of 83.5%.
Management also raised 2025 underwriting guidance to €1.425–1.525 billion, with BofA forecasting results at the upper end of that range.
“In the Nordics, we are confident that further underlying loss ratio improvements are possible alongside cost discipline and Topdanmark-related synergies,” the analysts said.
“This is, however, increasingly reflected in consensus expectations, and after yesterday’s strong print, we see limited room for near-term revisions,” they added.
Sampo’s financial result was another positive surprise, driven by better-than-expected investment income and lower finance expenses.
The analysts adjusted their earnings estimates upward by 4–5% and see a net operating profit CAGR of 11% over 2024–2027.
Sampo remains attractive in terms of capital return. The company announced a €200 million buyback with Q2 results and is expected to return over 15% of market cap across the next three years.
Still, BofA notes that in a sector context, “this is attractive for one of the most defensive companies in the sector but now screens low.”