Sanlam Encouraging underlying growth but earnings read-through remains complex - Q1 operating update

Research evidence excerpt

Sanlam Encouraging underlying growth but earnings read-through remains complex - Q1 operating update

Baron Nkomo AC CEEMEA Equity Research

(27-11) 507-0385 21 May 2026 J P M O R G A N

baron.nkomo@jpmorgan.com

Price Performance Summary Investment Thesis and Valuation

Investment Thesis

Sanlam has a track record of high-quality earnings, strong teen-

level ROEs, effective capital allocation, robust Embedded Value

results, and stable dividends. Significant corporate actions over

the past decade have positioned Sanlam to capture growth

opportunities in Africa and India, while its unmatched

geographic and product diversity provides a competitive edge vs

close peers. Despite a challenging South African macro

environment, Sanlam’s operational performance remains

strong, partly driven by these corporate actions. However, we

YTD 1m 3m 12m believe the current share price already reflects this positive

Abs -10.5% -0.8% -17.0% 2.3% performance, and ongoing corporate activity increases earnings

Company Data forecast risk. As a result, we rate Sanlam shares Neutral.

Shares O/S (mn) 2,117 Valuation

52-week range (c) 10,847-8,073

Market cap ($ mn) 11,175.05 Our Price Target is based on a Gordon Growth model,

Exchange rate 1,670.48 incorporating a 11% long-term growth rate, 14.6% cost of equity

Free float (%) 84.0% and a comprehensive ROE of 18%. Consistent with the

3M ADV (mn) 5.14

3M ADV ($ mn) 27.9 valuation of other SA life insurers, we add CSM back to Equity

Volatility (90 Day) 28 and CSM value is added to profits in order to derive a

Index - comprehensive ROE.

BBG ANR (Buy | Hold | Sell) 6|2|1

Key Metrics (FYE Dec)

Performance Drivers

in FY25A FY26E FY27E FY28E

Financial Estimates

Operating profit - Life - - - -

Life Reinsurance Operating Profit - - - -