Direct Line Insurance Group plc

BATS-CHIXE:DLGL Stock Report

Market Cap: UK£2.9b

Direct Line Insurance Group Valuation

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

Valuation Score

3/6

Valuation Score 3/6

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

Below Fair Value: DLGL (£2.24) is trading below our estimate of fair value (£4.14)

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

Key Valuation Metric

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

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

The above table shows the Price to Earnings ratio for DLGL. This is calculated by dividing DLGL's market cap by their current earnings.
What is DLGL's PE Ratio?
PE Ratio9.6x
EarningsUK£302.60m
Market CapUK£2.92b

Price to Earnings Ratio vs Peers

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

The above table shows the PE ratio for DLGL vs its peers. Here we also display the market cap and forecasted growth for additional consideration.
CompanyForward PEEstimated GrowthMarket Cap
Peer Average8.8x
HSX Hiscox
6.3x-2.4%UK£3.6b
LRE Lancashire Holdings
5.2x-7.5%UK£1.5b
BEZ Beazley
4.7x-17.9%UK£4.8b
ADM Admiral Group
19x12.1%UK£7.6b
DLGL Direct Line Insurance Group
9.6x8.1%UK£2.9b

Price-To-Earnings vs Peers: DLGL is expensive based on its Price-To-Earnings Ratio (9.6x) compared to the peer average (8.8x).

Price to Earnings Ratio vs Industry

How does DLGL's PE Ratio compare vs other companies in the European Insurance Industry?

1 CompanyPrice / EarningsEstimated GrowthMarket Cap
No. of Companies14PE0816243240+
1 CompanyEstimated GrowthMarket Cap
No more companies

Price-To-Earnings vs Industry: DLGL is good value based on its Price-To-Earnings Ratio (9.6x) compared to the European Insurance industry average (11.8x).

Price to Earnings Ratio vs Fair Ratio

What is DLGL'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.

DLGL PE Ratio vs Fair Ratio.
Fair Ratio
Current PE Ratio9.6x
Fair PE Ratio8.1x

Price-To-Earnings vs Fair Ratio: DLGL is expensive based on its Price-To-Earnings Ratio (9.6x) compared to the estimated Fair Price-To-Earnings Ratio (8.1x).

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 DLGL forecast and predictions for the stock price in 12 month’s time.
DateShare PriceAverage 1Y Price TargetDispersionHighLow1Y Actual priceAnalysts
CurrentUK£2.24
UK£2.16
-3.6%
19.4%UK£3.50UK£1.65n/a14
Nov ’25UK£1.64
UK£2.26
+37.7%
15.3%UK£3.50UK£1.95n/a17
Oct ’25UK£1.86
UK£2.26
+21.9%
15.2%UK£3.50UK£1.95n/a17
Sep ’25UK£1.91
UK£2.28
+19.6%
16.2%UK£3.50UK£1.95n/a17
Aug ’25UK£1.85
UK£2.28
+23.4%
16.4%UK£3.50UK£1.95n/a17
Jul ’25UK£1.98
UK£2.32
+16.9%
15.9%UK£3.50UK£1.95n/a16
Jun ’25UK£2.15
UK£2.32
+7.6%
15.9%UK£3.50UK£1.95n/a16
May ’25UK£1.83
UK£2.36
+29.0%
15.9%UK£3.50UK£1.95n/a14
Apr ’25UK£1.97
UK£2.29
+16.0%
17.8%UK£3.50UK£1.70n/a13
Mar ’25UK£2.08
UK£2.10
+1.3%
22.7%UK£3.50UK£1.50n/a13
Feb ’25UK£1.64
UK£2.10
+28.1%
20.8%UK£3.50UK£1.50n/a15
Jan ’25UK£1.83
UK£2.05
+12.2%
23.4%UK£3.50UK£1.50n/a14
Dec ’24UK£1.92
UK£2.04
+6.3%
23.6%UK£3.50UK£1.50n/a14
Nov ’24UK£1.55
UK£1.92
+23.7%
25.9%UK£3.50UK£1.50UK£1.6413
Oct ’24UK£1.72
UK£1.98
+14.9%
28.3%UK£3.50UK£1.50UK£1.8613
Sep ’24UK£1.58
UK£1.96
+23.7%
26.2%UK£3.50UK£1.50UK£1.9117
Aug ’24UK£1.51
UK£1.97
+30.1%
26.4%UK£3.50UK£1.50UK£1.8517
Jul ’24UK£1.36
UK£2.02
+48.4%
24.4%UK£3.50UK£1.52UK£1.9818
Jun ’24UK£1.63
UK£2.02
+24.0%
24.4%UK£3.50UK£1.52UK£2.1518
May ’24UK£1.72
UK£2.04
+18.4%
24.5%UK£3.50UK£1.52UK£1.8318
Apr ’24UK£1.38
UK£2.00
+44.5%
26.2%UK£3.50UK£1.36UK£1.9718
Mar ’24UK£1.77
UK£2.04
+15.4%
25.6%UK£3.50UK£1.42UK£2.0818
Feb ’24UK£1.80
UK£2.22
+23.3%
24.9%UK£3.50UK£1.42UK£1.6418
Jan ’24UK£2.22
UK£2.43
+9.7%
17.9%UK£3.50UK£1.70UK£1.8318
Dec ’23UK£2.09
UK£2.42
+16.3%
17.7%UK£3.50UK£1.70UK£1.9218
Nov ’23UK£2.04
UK£2.47
+21.1%
17.2%UK£3.50UK£1.75UK£1.5519

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

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