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 (£6.31) is trading below our estimate of fair value (£30.31)

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?

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

The above table shows the Price to Earnings ratio for LRE. This is calculated by dividing LRE's market cap by their current earnings.
What is LRE's PE Ratio?
PE Ratio5.2x
EarningsUS$363.10m
Market CapUS$1.90b

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 Average7.2x
DLG Direct Line Insurance Group
6.8x8.0%UK£2.1b
HSX Hiscox
6.2x-2.4%UK£3.5b
BEZ Beazley
4.7x-17.0%UK£4.9b
SBRE Sabre Insurance Group
11.2x13.7%UK£327.4m
LRE Lancashire Holdings
5.2x-7.2%UK£1.5b

Price-To-Earnings vs Peers: LRE is good value based on its Price-To-Earnings Ratio (5.2x) compared to the peer average (7.2x).

Price to Earnings Ratio vs Industry

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

1 CompanyPrice / EarningsEstimated GrowthMarket Cap
LRE 5.2xIndustry Avg. 11.8xNo. of Companies12PE0816243240+
1 CompanyEstimated GrowthMarket Cap
No more companies

Price-To-Earnings vs Industry: LRE is good value based on its Price-To-Earnings Ratio (5.2x) compared to the European Insurance industry average (11.8x).

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 Ratio5.2x
Fair PE Ratio8.6x

Price-To-Earnings vs Fair Ratio: LRE is good value based on its Price-To-Earnings Ratio (5.2x) compared to the estimated Fair Price-To-Earnings Ratio (8.6x).

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£6.31
UK£7.96
+26.2%
7.2%UK£9.70UK£7.15n/a14
Nov ’25UK£6.34
UK£7.69
+21.3%
7.0%UK£9.13UK£7.09n/a14
Oct ’25UK£6.67
UK£7.47
+12.0%
8.0%UK£8.95UK£6.25n/a16
Sep ’25UK£6.72
UK£7.44
+10.7%
7.9%UK£9.02UK£6.30n/a16
Aug ’25UK£6.28
UK£7.50
+19.4%
7.6%UK£8.88UK£6.06n/a16
Jul ’25UK£6.01
UK£7.54
+25.4%
8.1%UK£9.03UK£6.16n/a16
Jun ’25UK£6.33
UK£7.59
+19.9%
8.6%UK£9.14UK£6.01n/a16
May ’25UK£6.02
UK£7.52
+24.9%
8.2%UK£8.83UK£5.98n/a16
Apr ’25UK£6.19
UK£7.54
+21.8%
8.3%UK£8.78UK£5.94n/a16
Mar ’25UK£6.59
UK£7.43
+12.8%
7.8%UK£8.44UK£5.95n/a16
Feb ’25UK£5.96
UK£7.32
+22.7%
8.4%UK£8.38UK£5.91n/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£5.93UK£6.3416
Oct ’24UK£5.90
UK£7.47
+26.6%
9.3%UK£8.95UK£6.20UK£6.6716
Sep ’24UK£5.76
UK£7.24
+25.7%
10.0%UK£8.69UK£6.02UK£6.7216
Aug ’24UK£5.96
UK£7.07
+18.8%
10.4%UK£8.52UK£5.90UK£6.2816
Jul ’24UK£5.78
UK£7.00
+21.1%
11.0%UK£8.57UK£5.73UK£6.0116
Jun ’24UK£6.24
UK£7.09
+13.7%
11.3%UK£8.81UK£5.89UK£6.3317
May ’24UK£6.13
UK£6.98
+14.0%
10.7%UK£8.24UK£5.83UK£6.0216
Apr ’24UK£5.53
UK£7.11
+28.6%
9.8%UK£8.40UK£5.92UK£6.1916
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

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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