A Fresh Look at Power Corporation of Canada (TSX:POW) Valuation Ahead of Q3 2025 Financial Results

Power Corporation of Canada (TSX:POW) is in the spotlight as investors await its third quarter 2025 financial results, set for release on November 12. The follow-up conference call is expected to offer fresh insights.

See our latest analysis for Power Corporation of Canada.

Power Corporation of Canada’s recent addition to the S&P/TSX Preferred Share Index has kept investor interest high, and the stock’s rally reflects a real shift in sentiment. Its 49% share price return so far this year, along with a 1-year total shareholder return of 55%, underscore both building momentum and confidence around its growth prospects and capital returns. This performance has outpaced much of the Canadian financial sector over multiple years.

If you’re looking to spot more companies with strong momentum and expanding insider ownership, it’s a great moment to explore fast growing stocks with high insider ownership.

With shares soaring and analysts divided, the big question facing investors is whether Power Corporation of Canada remains undervalued or if all its future growth has already been priced in by the market.

Most Popular Narrative: 10% Overvalued

With the most widely followed narrative setting a fair value just below the latest close, Power Corporation of Canada’s current price exceeds this consensus view. The story behind this valuation involves both stable earnings expectations and a bold view on future digital and demographic growth.

Increased demand for wealth management and retirement solutions driven by an aging population and intergenerational wealth transfer in North America and Europe is creating substantial and sustained asset inflows across Power Corp's core subsidiaries (Great-West Lifeco, IGM, Wealthsimple). This is expected to lead to recurring fee revenue and long-term adjusted earnings growth. The company is benefiting from digital innovation and technology-led transformation, as evidenced by double-digit AUM growth at digital platforms like Wealthsimple and record flows at IG Wealth. These enhancements are expected to provide continued access to new customer segments and improve operational efficiency, supporting both net margin expansion and revenue growth going forward.

Read the complete narrative.

Curious what powers this valuation? A blend of surging digital assets, ambitious demographic bets, and operational gains could be at play. But which core numbers drive this higher price call? Discover the narrative’s big assumptions and why analysts see the next few years as pivotal for POW’s true worth.

Result: Fair Value of $59.75 (OVERVALUED)

Have a read of the narrative in full and understand what's behind the forecasts.

However, ongoing regulatory changes and any underperformance at core subsidiaries could quickly challenge the current growth story and put pressure on earnings expectations.

Find out about the key risks to this Power Corporation of Canada narrative.

Another View: Discounted Cash Flow Perspective

While consensus puts Power Corporation of Canada’s fair value below the current share price, our SWS DCF model presents a different perspective. According to this model, POW is trading about 21% beneath its estimated fair value. This suggests there could be substantial room for upside if future growth develops as forecasted. However, can this optimism hold up to real-world challenges?

Look into how the SWS DCF model arrives at its fair value.

Simply Wall St performs a discounted cash flow (DCF) on every stock in the world every day (check out Power Corporation of Canada for example). We show the entire calculation in full. You can track the result in your watchlist or portfolio and be alerted when this changes, or use our stock screener to discover 833 undervalued stocks based on their cash flows. If you save a screener we even alert you when new companies match - so you never miss a potential opportunity.

Build Your Own Power Corporation of Canada Narrative

If your perspective differs or you prefer a hands-on approach, it only takes a few minutes to shape your own view using the data. Do it your way

A great starting point for your Power Corporation of Canada research is our analysis highlighting 3 key rewards and 1 important warning sign that could impact your investment decision.

Looking for more investment ideas?

Smart investors never limit themselves. Now is your chance to spot the next winners before everyone else. The right screen can reveal real opportunities worth your attention.

• Uncover stocks with strong financials and untapped growth by checking out these 3580 penny stocks with strong financials with the potential to outperform peers in volatile markets.
• Accelerate your journey into the future by targeting innovation leaders through these 26 AI penny stocks poised to benefit from rapid advancements in artificial intelligence.
• Boost your passive income with these 22 dividend stocks with yields > 3% offering attractive yields that can strengthen your portfolio and help you reach your financial goals faster.

This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com