Brookfield Wealth Solutions (BNT): Assessing Value as Institutional Investors Signal Growing Confidence

Several institutional investors have recently added to or opened new positions in Brookfield Wealth Solutions (NYSE:BNT), including Arkadios Wealth Advisors and Goldman Sachs. This trend points to rising institutional confidence in the company’s long-term outlook.

See our latest analysis for Brookfield Wealth Solutions.

Brookfield Wealth Solutions’ share price has climbed 19.5% so far this year, with a 20.3% total shareholder return over the past twelve months, and a striking 84% gain over three years. This positive momentum, paired with increased institutional buying, suggests that many investors see further growth potential ahead.

If you’re looking to spot the next breakout, now is a great moment to broaden your investing horizons and discover fast growing stocks with high insider ownership

But with impressive gains and growing institutional interest, the big question remains: Is Brookfield Wealth Solutions still undervalued, or is everything already priced in, leaving little room for fresh upside?

Price-to-Earnings of 17.6x: Is it justified?

Brookfield Wealth Solutions currently trades at a price-to-earnings (P/E) ratio of 17.6x, notably higher than both its industry peers and the wider US Insurance sector. At $45.71 per share, the market is assigning a premium to BNT’s recent earnings compared to competitors.

The price-to-earnings (P/E) ratio compares a company’s share price to its per-share earnings. For insurance companies like BNT, this multiple is a key indicator of how the market values future profit potential and current performance. A higher P/E suggests that investors anticipate stronger growth, superior profitability, or both. It can also mean the stock is expensive relative to peers.

Compared to the peer average P/E of 11.6x and the US Insurance industry average of 13.2x, BNT’s multiple is significantly elevated. This gap signals that the market is pricing in either robust growth prospects or placing a sizable premium on BNT’s earnings quality. However, such a valuation means there is less margin for error; if future results disappoint, the stock could re-rate toward sector norms.

See what the numbers say about this price — find out in our valuation breakdown.

Result: Price-to-Earnings of 17.6x (OVERVALUED)

However, short-term price volatility and limited visibility on future earnings could quickly shift market sentiment if key metrics fall short of expectations.

Find out about the key risks to this Brookfield Wealth Solutions narrative.

Another View: What Does the DCF Say?

While Brookfield Wealth Solutions appears expensive based on earnings multiples, our SWS DCF model offers a different perspective. It estimates fair value at $37.32 per share, which is below the current price. This suggests the stock may be overvalued on a cash-flow basis. However, it is possible the market is factoring in information that the model does not account for.

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 Brookfield Wealth Solutions 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 876 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 Brookfield Wealth Solutions Narrative

If you want to test your own ideas or take a different view on Brookfield Wealth Solutions, you can build a personal narrative in just a few minutes, and Do it your way.

A great starting point for your Brookfield Wealth Solutions research is our analysis highlighting 1 key reward and 2 important warning signs that could impact your investment decision.

Looking for more investment ideas?

Unlock opportunities beyond Brookfield Wealth Solutions with unique stocks selected by the Simply Wall Street Screener. This tool can be your key to a smarter, more diversified investing journey.

• Boost your portfolio’s income by targeting steady performers offering healthy yields through these 16 dividend stocks with yields > 3%.
• Capture potential in transformative industries by pinpointing future leaders powering tomorrow’s breakthroughs in these 25 AI penny stocks.
• Seize opportunities that others might miss by uncovering overlooked gems trading below their intrinsic worth via these 876 undervalued stocks based on cash flows.

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