Definity Financial Corporation

TSX:DFY Stock Report

Market Cap: CA$6.4b

Definity Financial Valuation

Is DFY 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 DFY when looking at its future cash flows? For this estimate we use a Discounted Cash Flow model.

Below Fair Value: DFY (CA$56.93) is trading below our estimate of fair value (CA$74.77)

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

Key Valuation Metric

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

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

The above table shows the Price to Earnings ratio for DFY. This is calculated by dividing DFY's market cap by their current earnings.
What is DFY's PE Ratio?
PE Ratio12.1x
EarningsCA$539.70m
Market CapCA$6.44b

Price to Earnings Ratio vs Peers

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

The above table shows the PE ratio for DFY vs its peers. Here we also display the market cap and forecasted growth for additional consideration.
CompanyForward PEEstimated GrowthMarket Cap
Peer Average12.6x
FFH Fairfax Financial Holdings
7.5x-13.4%CA$42.1b
IFC Intact Financial
23.2x6.4%CA$47.9b
TSU Trisura Group
16.9x19.0%CA$1.9b
ELF E-L Financial
2.8xn/aCA$5.1b
DFY Definity Financial
12.1x-10.3%CA$6.4b

Price-To-Earnings vs Peers: DFY is good value based on its Price-To-Earnings Ratio (12.1x) compared to the peer average (12.6x).

Price to Earnings Ratio vs Industry

How does DFY's PE Ratio compare vs other companies in the North American Insurance Industry?

3 CompaniesPrice / EarningsEstimated GrowthMarket Cap
DFY 12.1xIndustry Avg. 13.2xNo. of Companies14PE0816243240+
3 CompaniesEstimated GrowthMarket Cap
No more companies

Price-To-Earnings vs Industry: DFY is good value based on its Price-To-Earnings Ratio (12.1x) compared to the North American Insurance industry average (12.9x).

Price to Earnings Ratio vs Fair Ratio

What is DFY'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.

DFY PE Ratio vs Fair Ratio.
Fair Ratio
Current PE Ratio12.1x
Fair PE Ratio9.3x

Price-To-Earnings vs Fair Ratio: DFY is expensive based on its Price-To-Earnings Ratio (12.1x) compared to the estimated Fair Price-To-Earnings Ratio (9.3x).

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 DFY forecast and predictions for the stock price in 12 month’s time.
DateShare PriceAverage 1Y Price TargetDispersionHighLow1Y Actual priceAnalysts
CurrentCA$56.93
CA$58.60
+2.9%
5.1%CA$67.00CA$55.00n/a10
Nov ’25CA$54.03
CA$56.80
+5.1%
5.9%CA$65.00CA$53.00n/a10
Oct ’25CA$54.40
CA$53.30
-2.0%
6.3%CA$62.00CA$50.00n/a10
Sep ’25CA$50.00
CA$52.80
+5.6%
6.4%CA$62.00CA$50.00n/a10
Aug ’25CA$47.12
CA$50.32
+6.8%
9.7%CA$60.00CA$43.00n/a11
Jul ’25CA$44.98
CA$49.23
+9.4%
8.8%CA$60.00CA$43.00n/a11
Jun ’25CA$43.23
CA$49.21
+13.8%
8.4%CA$60.00CA$43.00n/a12
May ’25CA$46.54
CA$48.33
+3.9%
8.9%CA$60.00CA$44.00n/a12
Apr ’25CA$43.31
CA$46.67
+7.8%
9.3%CA$59.00CA$43.00n/a12
Mar ’25CA$45.55
CA$46.67
+2.5%
9.3%CA$59.00CA$43.00n/a12
Feb ’25CA$39.69
CA$43.50
+9.6%
9.8%CA$54.00CA$39.00n/a11
Jan ’25CA$37.54
CA$43.32
+15.4%
9.7%CA$54.00CA$39.00n/a11
Dec ’24CA$37.16
CA$43.32
+16.6%
9.7%CA$54.00CA$39.00n/a11
Nov ’24CA$38.75
CA$42.85
+10.6%
10.8%CA$53.00CA$36.00CA$54.0310
Oct ’24CA$37.50
CA$42.35
+12.9%
11.5%CA$53.00CA$36.00CA$54.4010
Sep ’24CA$37.79
CA$42.23
+11.7%
11.1%CA$53.00CA$36.00CA$50.0011
Aug ’24CA$33.19
CA$41.86
+26.1%
9.3%CA$52.00CA$39.00CA$47.1211
Jul ’24CA$35.15
CA$42.95
+22.2%
10.5%CA$52.00CA$39.00CA$44.9811
Jun ’24CA$36.57
CA$42.95
+17.5%
10.5%CA$52.00CA$39.00CA$43.2311
May ’24CA$36.86
CA$43.23
+17.3%
9.1%CA$50.00CA$39.00CA$46.5411
Apr ’24CA$35.27
CA$42.95
+21.8%
8.0%CA$49.00CA$39.00CA$43.3111
Mar ’24CA$35.80
CA$42.95
+20.0%
8.0%CA$49.00CA$39.00CA$45.5511
Feb ’24CA$35.20
CA$42.50
+20.7%
6.6%CA$46.00CA$38.00CA$39.6911
Jan ’24CA$38.48
CA$42.68
+10.9%
6.3%CA$46.00CA$38.00CA$37.5411
Dec ’23CA$39.61
CA$42.68
+7.8%
6.3%CA$46.00CA$38.00CA$37.1611
Nov ’23CA$40.70
CA$41.68
+2.4%
7.5%CA$46.00CA$35.00CA$38.7511

Analyst Forecast: Target price is less than 20% higher than the current share price.

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