ASR Nederland (ENXTAM:ASRNL): Reassessing Valuation After New Regulatory Approval for Its Risk Model

ASR Nederland (ENXTAM:ASRNL) has secured regulatory approval to use its Partial Internal Model for a.s.r. Life, a technical but meaningful upgrade in how the insurer measures and manages its capital and risk.

See our latest analysis for ASR Nederland.

The latest Partial Internal Model approval lands on a share price that has already climbed to $58.72, with a strong year to date share price return underpinning a robust 1 year total shareholder return and impressive multi year total shareholder returns. This suggests that momentum in the story is still broadly building rather than fading.

If this kind of steady, risk aware growth appeals to you, it could be a good moment to scan the market for fast growing stocks with high insider ownership and see what else stands out.

Yet with the shares trading just below analyst targets but still at a sizeable discount to some intrinsic estimates, investors have to ask: is ASR Nederland still undervalued or is the market already discounting its future growth?

Price-to-Earnings of 11.6x: Is it justified?

On a price-to-earnings ratio of 11.6x at the last close of €58.72, ASR Nederland screens as modestly expensive versus some valuation markers, but still not stretched against the wider European insurance space.

The price to earnings multiple compares what investors are paying today for each unit of current earnings, a core yardstick for mature, profitable insurers with relatively stable profit profiles. For ASR Nederland, this lens is important because earnings quality is flagged as high and profits have compounded at a healthy pace over the past five years.

Relative signals send a mixed message. Against the insurer specific fair price to earnings estimate of 10.8x, the shares look fully priced and potentially ahead of themselves, suggesting the market has already baked in a degree of future profit growth. Yet when the same 11.6x multiple is set beside the broader European insurance average of 12.9x, ASR Nederland still trades at a noticeable discount, implying investors are not according it the same earnings premium as many regional peers despite faster recent profit growth.

Explore the SWS fair ratio for ASR Nederland

Result: Price-to-Earnings of 11.6x (ABOUT RIGHT)

However, slowing top line momentum and the risk of profit normalisation after several strong years could quickly cool sentiment and compress the valuation.

Find out about the key risks to this ASR Nederland narrative.

Another View on Value

Step away from the 11.6x earnings multiple and our DCF model paints a far bolder picture, implying ASR Nederland trades about 41% below its fair value near €99.80. If that gap is even half right, is the market mispricing a durable compounder or overestimating its risks?

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 ASR Nederland 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 909 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 ASR Nederland Narrative

If you see the numbers differently or prefer hands on research, you can build a personalised view of ASR Nederland in under three minutes: Do it your way.

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

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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.

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