Fairfax Financial Holdings Limited

TSX:FFH.PRM Stock Report

Market Cap: CA$42.8b

Fairfax Financial Holdings Valuation

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

Valuation Score

5/6

Valuation Score 5/6

  • 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 FFH.PRM when looking at its future cash flows? For this estimate we use a Discounted Cash Flow model.

Below Fair Value: FFH.PRM (CA$24.96) is trading below our estimate of fair value (CA$72.63)

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

Key Valuation Metric

Which metric is best to use when looking at relative valuation for FFH.PRM?

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

The above table shows the Price to Earnings ratio for FFH.PRM. This is calculated by dividing FFH.PRM's market cap by their current earnings.
What is FFH.PRM's PE Ratio?
PE Ratio7.7x
EarningsUS$4.00b
Market CapUS$30.69b

Price to Earnings Ratio vs Peers

How does FFH.PRM's PE Ratio compare to its peers?

The above table shows the PE ratio for FFH.PRM vs its peers. Here we also display the market cap and forecasted growth for additional consideration.
CompanyForward PEEstimated GrowthMarket Cap
Peer Average16.8x
IFC Intact Financial
23.6x6.4%CA$48.6b
DFY Definity Financial
12.6x-10.3%CA$6.8b
TSU Trisura Group
17.1x19.0%CA$1.9b
SLF Sun Life Financial
13.9x6.8%CA$49.0b
FFH.PRM Fairfax Financial Holdings
7.7x-13.4%CA$42.8b

Price-To-Earnings vs Peers: FFH.PRM is good value based on its Price-To-Earnings Ratio (7.7x) compared to the peer average (16.8x).

Price to Earnings Ratio vs Industry

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

3 CompaniesPrice / EarningsEstimated GrowthMarket Cap
FFH.PRM 7.7xIndustry Avg. 13.3xNo. of Companies15PE0816243240+
3 CompaniesEstimated GrowthMarket Cap
No more companies

Price-To-Earnings vs Industry: FFH.PRM is good value based on its Price-To-Earnings Ratio (7.7x) compared to the North American Insurance industry average (13.1x).

Price to Earnings Ratio vs Fair Ratio

What is FFH.PRM'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.

FFH.PRM PE Ratio vs Fair Ratio.
Fair Ratio
Current PE Ratio7.7x
Fair PE Ratio10.2x

Price-To-Earnings vs Fair Ratio: FFH.PRM is good value based on its Price-To-Earnings Ratio (7.7x) compared to the estimated Fair Price-To-Earnings Ratio (10.2x).

Analyst Price Targets

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

Analyst Forecast: Insufficient data to show price forecast.

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