Insurance Australia Group Limited

CHIA:IAG Stock Report

Market Cap: AU$18.7b

Insurance Australia Group Valuation

Is IAG undervalued compared to its fair value, analyst forecasts and its price relative to the market?

Valuation Score

4/6

Valuation Score 4/6

  • Below Fair Value

  • Significantly Below Fair Value

  • Price-To-Earnings vs Peers

  • Price-To-Earnings vs Industry

  • Price-To-Earnings vs Fair Ratio

  • Analyst Forecast

Share Price vs Fair Value

What is the Fair Price of IAG when looking at its future cash flows? For this estimate we use a Discounted Cash Flow model.

Below Fair Value: IAG (A$7.91) is trading below our estimate of fair value (A$11.41)

Significantly Below Fair Value: IAG is trading below fair value by more than 20%.

Key Valuation Metric

Which metric is best to use when looking at relative valuation for IAG?

Key metric: As IAG is profitable we use its Price-To-Earnings Ratio for relative valuation analysis.

The above table shows the Price to Earnings ratio for IAG. This is calculated by dividing IAG's market cap by their current earnings.
What is IAG's PE Ratio?
PE Ratio20.8x
EarningsAU$898.00m
Market CapAU$18.69b

Price to Earnings Ratio vs Peers

How does IAG's PE Ratio compare to its peers?

The above table shows the PE ratio for IAG vs its peers. Here we also display the market cap and forecasted growth for additional consideration.
CompanyForward PEEstimated GrowthMarket Cap
Peer Average22.8x
QBE QBE Insurance Group
11x0.8%AU$28.6b
SUN Suncorp Group
26.1x4.4%AU$24.0b
SDF Steadfast Group
27.2x10.9%AU$6.2b
AUB AUB Group
26.8x11.1%AU$3.7b
IAG Insurance Australia Group
20.8x5.5%AU$18.7b

Price-To-Earnings vs Peers: IAG is good value based on its Price-To-Earnings Ratio (20.8x) compared to the peer average (22.7x).

Price to Earnings Ratio vs Industry

How does IAG's PE Ratio compare vs other companies in the Global Insurance Industry?

14 CompaniesPrice / EarningsEstimated GrowthMarket Cap
IAG 20.8xIndustry Avg. 11.2xNo. of Companies71PE0816243240+
14 CompaniesEstimated GrowthMarket Cap
No more companies

Price-To-Earnings vs Industry: IAG is expensive based on its Price-To-Earnings Ratio (20.8x) compared to the Global Insurance industry average (11.1x).

Price to Earnings Ratio vs Fair Ratio

What is IAG's PE Ratio compared to its Fair PE Ratio? This is the expected PE Ratio taking into account the company's forecast earnings growth, profit margins and other risk factors.

IAG PE Ratio vs Fair Ratio.
Fair Ratio
Current PE Ratio20.8x
Fair PE Ratio21.5x

Price-To-Earnings vs Fair Ratio: IAG is good value based on its Price-To-Earnings Ratio (20.8x) compared to the estimated Fair Price-To-Earnings Ratio (21.5x).

Analyst Price Targets

What is the analyst 12-month forecast and do we have any statistical confidence in the consensus price target?

The above table shows the analyst IAG forecast and predictions for the stock price in 12 month’s time.
DateShare PriceAverage 1Y Price TargetDispersionHighLow1Y Actual priceAnalysts
CurrentAU$7.91
AU$7.55
-4.5%
7.8%AU$8.40AU$6.30n/a12
Nov ’25AU$7.37
AU$7.55
+2.5%
7.8%AU$8.40AU$6.30n/a12
Oct ’25AU$7.27
AU$7.43
+2.2%
7.5%AU$8.25AU$6.30n/a12
Sep ’25AU$7.55
AU$7.30
-3.3%
9.1%AU$8.25AU$6.15n/a13
Aug ’25AU$7.44
AU$7.17
-3.6%
9.6%AU$8.10AU$6.00n/a13
Jul ’25AU$7.11
AU$6.91
-2.8%
10.1%AU$8.10AU$6.00n/a13
Jun ’25AU$6.20
AU$6.38
+2.9%
6.8%AU$7.20AU$5.45n/a14
May ’25AU$6.42
AU$6.36
-1.0%
7.2%AU$7.20AU$5.45n/a14
Apr ’25AU$6.41
AU$6.23
-2.8%
6.2%AU$6.95AU$5.45n/a14
Mar ’25AU$6.17
AU$6.15
-0.3%
5.5%AU$6.75AU$5.45n/a14
Feb ’25AU$6.05
AU$6.05
0%
5.6%AU$6.60AU$5.50n/a13
Jan ’25AU$5.65
AU$6.03
+6.7%
5.1%AU$6.50AU$5.45n/a13
Dec ’24AU$5.93
AU$5.90
-0.6%
7.5%AU$6.50AU$5.09n/a14
Nov ’24AU$5.73
AU$5.90
+3.0%
7.5%AU$6.50AU$5.09AU$7.3714
Oct ’24AU$5.69
AU$5.89
+3.6%
7.5%AU$6.50AU$5.09AU$7.2714
Sep ’24AU$5.81
AU$5.88
+1.1%
7.4%AU$6.50AU$5.09AU$7.5514
Aug ’24AU$5.95
AU$5.68
-4.5%
7.3%AU$6.25AU$4.80AU$7.4414
Jul ’24AU$5.71
AU$5.43
-5.0%
7.1%AU$6.05AU$4.70AU$7.1114
Jun ’24AU$5.19
AU$5.29
+2.1%
7.4%AU$5.75AU$4.30AU$6.2015
May ’24AU$5.02
AU$5.24
+4.4%
7.8%AU$5.75AU$4.30AU$6.4213
Apr ’24AU$4.69
AU$5.19
+10.6%
7.5%AU$5.72AU$4.30AU$6.4113
Mar ’24AU$4.67
AU$5.19
+11.1%
7.5%AU$5.72AU$4.30AU$6.1713
Feb ’24AU$4.90
AU$5.38
+9.8%
8.0%AU$6.03AU$4.40AU$6.0513
Jan ’24AU$4.76
AU$5.27
+10.8%
10.2%AU$6.00AU$4.20AU$5.6512
Dec ’23AU$4.79
AU$5.30
+10.6%
10.5%AU$6.00AU$4.20AU$5.9311
Nov ’23AU$4.98
AU$5.27
+5.8%
11.6%AU$6.00AU$3.90AU$5.7311

Analyst Forecast: Target price is lower than the current share price.

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