Lancashire Holdings Limited

LSE:LRE Stock Report

Market Cap: UK£1.5b

Lancashire Holdings Valuation

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

Valuation Score

6/6

Valuation Score 6/6

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

Below Fair Value: LRE (£6.23) is trading below our estimate of fair value (£28.97)

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


Key Valuation Metric

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

Other financial metrics that can be useful for relative valuation.

LRE key valuation metrics and ratios. From Price to Earnings, Price to Sales and Price to Book to Price to Earnings Growth Ratio, Enterprise Value and EBITDA.
Key Statistics
Enterprise Value/Revenue1x
Enterprise Value/EBITDA4.3x
PEG Ratio10.5x

Price to Earnings Ratio vs Peers

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

The above table shows the PE ratio for LRE vs its peers. Here we also display the market cap and forecasted growth for additional consideration.
CompanyForward PEEstimated GrowthMarket Cap
Peer Average12.6x
DLG Direct Line Insurance Group
12.1x13.5%UK£2.5b
BEZ Beazley
5.4x-5.0%UK£4.4b
HSX Hiscox
7.5x-1.0%UK£4.2b
ADM Admiral Group
25.2x12.0%UK£8.5b
LRE Lancashire Holdings
5.8x0.6%UK£1.5b

Price-To-Earnings vs Peers: LRE is good value based on its Price-To-Earnings Ratio (5.8x) compared to the peer average (12.6x).


Price to Earnings Ratio vs Industry

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

0 CompaniesPrice / EarningsEstimated GrowthMarket Cap
Industry Avg.n/a13.6%
n/an/an/a
No. of CompaniesPE048121620

Fetching data

0 CompaniesPrice / EarningsEstimated GrowthMarket Cap
Industry Avg.n/a13.6%
n/an/an/a
No more companies

Price-To-Earnings vs Industry: LRE is good value based on its Price-To-Earnings Ratio (5.8x) compared to the European Insurance industry average (10.8x).


Price to Earnings Ratio vs Fair Ratio

What is LRE'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.

LRE PE Ratio vs Fair Ratio.
Fair Ratio
Current PE Ratio5.8x
Fair PE Ratio12.6x

Price-To-Earnings vs Fair Ratio: LRE is good value based on its Price-To-Earnings Ratio (5.8x) compared to the estimated Fair Price-To-Earnings Ratio (12.6x).


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 LRE forecast and predictions for the stock price in 12 month’s time.
DateShare PriceAverage 1Y Price TargetDispersionHighLow1Y Actual priceAnalysts
CurrentUK£6.24
UK£7.54
+20.8%
8.8%UK£8.79UK£5.72n/a16
Mar ’25UK£6.59
UK£7.42
+12.5%
8.4%UK£8.44UK£5.71n/a16
Feb ’25UK£5.96
UK£7.30
+22.5%
8.9%UK£8.38UK£5.68n/a16
Jan ’25UK£6.24
UK£7.36
+17.9%
9.1%UK£8.55UK£5.74n/a16
Dec ’24UK£6.25
UK£7.26
+16.3%
9.1%UK£8.45UK£5.67n/a16
Nov ’24UK£5.79
UK£7.33
+26.7%
8.9%UK£8.50UK£5.93n/a16
Oct ’24UK£5.90
UK£7.47
+26.6%
9.3%UK£8.95UK£6.20n/a16
Sep ’24UK£5.76
UK£7.24
+25.7%
10.0%UK£8.69UK£6.02n/a16
Aug ’24UK£5.96
UK£7.07
+18.8%
10.4%UK£8.52UK£5.90n/a16
Jul ’24UK£5.78
UK£7.00
+21.1%
11.0%UK£8.57UK£5.73n/a16
Jun ’24UK£6.24
UK£7.09
+13.7%
11.3%UK£8.81UK£5.89n/a17
May ’24UK£6.13
UK£6.98
+14.0%
10.7%UK£8.24UK£5.83n/a16
Apr ’24UK£5.53
UK£7.11
+28.6%
9.8%UK£8.40UK£5.92n/a16
Mar ’24UK£6.10
UK£7.23
+18.5%
9.6%UK£8.56UK£6.03UK£6.5917
Feb ’24UK£6.03
UK£6.81
+12.9%
12.5%UK£8.18UK£4.76UK£5.9617
Jan ’24UK£6.50
UK£6.52
+0.2%
12.3%UK£8.00UK£4.86UK£6.2417
Dec ’23UK£6.06
UK£6.22
+2.6%
14.1%UK£7.90UK£4.79UK£6.2517
Nov ’23UK£5.13
UK£6.09
+18.7%
14.5%UK£7.53UK£5.04UK£5.7918
Oct ’23UK£4.97
UK£6.50
+30.7%
15.0%UK£8.04UK£5.03UK£5.9018
Sep ’23UK£4.70
UK£6.28
+33.4%
15.9%UK£8.10UK£4.79UK£5.7617
Aug ’23UK£4.41
UK£5.96
+35.1%
17.9%UK£7.92UK£4.31UK£5.9617
Jul ’23UK£3.94
UK£6.10
+54.8%
21.6%UK£8.05UK£4.13UK£5.7817
Jun ’23UK£3.87
UK£6.09
+57.5%
20.2%UK£7.79UK£4.51UK£6.2416
May ’23UK£4.24
UK£6.16
+45.1%
19.7%UK£7.82UK£4.53UK£6.1317
Apr ’23UK£4.42
UK£6.46
+46.1%
20.4%UK£8.43UK£4.47UK£5.5317
Mar ’23UK£4.47
UK£6.73
+50.6%
14.9%UK£8.25UK£5.12UK£6.1015

Analyst Forecast: Target price is more than 20% higher than the current share price and analysts are within a statistically confident range of agreement.


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