Old Mutual Valuation

Q: What is the Fair Price of OMU when looking at its future cash flows? For this estimate we use a Discounted Cash Flow model.

OMU (ZAR12.95) is trading above our estimate of [[fair value]] (ZAR3.99)

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

Valuation Score

2/6

Valuation Score 2/6

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

Below Fair Value: OMU (ZAR12.95) is trading above our estimate of fair value (ZAR3.99)

Significantly Below Fair Value: OMU is trading above our estimate of fair value.

Key Valuation Metric

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

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

The above table shows the Price to Earnings ratio for OMU. This is calculated by dividing OMU's market cap by their current earnings.
What is OMU's PE Ratio?
PE Ratio	7.1x
Earnings	R7.95b
Market Cap	R56.33b

OMU 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/Revenue	0.3x
Enterprise Value/EBITDA	1.7x
PEG Ratio	2.6x

Price to Earnings Ratio vs Peers

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

The above table shows the PE ratio for OMU vs its peers. Here we also display the market cap and forecasted growth for additional consideration.
Company	Forward PE	Estimated Growth	Market Cap
Peer Average	13.1x
MTM Momentum Group	10.7x	14.5%	R40.8b
DSY Discovery	18.2x	14.6%	R128.9b
SLM Sanlam	11.1x	2.5%	R182.8b
CLI Clientèle	12.5x	n/a	R4.3b
OMU Old Mutual	7.1x	2.7%	R56.3b

Price-To-Earnings vs Peers: OMU is good value based on its Price-To-Earnings Ratio (7.1x) compared to the peer average (13.1x).

Price to Earnings Ratio vs Industry

How does OMU's PE Ratio compare vs other companies in the African Insurance Industry?

3 Companies	Price / Earnings	Estimated Growth	Market Cap

3 Companies		Estimated Growth	Market Cap

No more companies

Price-To-Earnings vs Industry: OMU is expensive based on its Price-To-Earnings Ratio (7.1x) compared to the African Insurance industry average (5.9x).

Price to Earnings Ratio vs Fair Ratio

What is OMU'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.

OMU PE Ratio vs Fair Ratio.
Fair Ratio
Current PE Ratio	7.1x
Fair PE Ratio	10.9x

Price-To-Earnings vs Fair Ratio: OMU is good value based on its Price-To-Earnings Ratio (7.1x) compared to the estimated Fair Price-To-Earnings Ratio (10.9x).

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 OMU forecast and predictions for the stock price in 12 month’s time.
Date	Share Price	Average 1Y Price Target	Dispersion	High	Low	1Y Actual price	Analysts
Current	R12.95	R13.66 +5.5%	16.1%	R16.85	R10.00	n/a	7
Nov ’25	R12.29	R13.66 +11.1%	16.1%	R16.85	R10.00	n/a	7
Oct ’25	R13.47	R14.14 +5.0%	14.4%	R16.85	R10.00	n/a	7
Sep ’25	R12.90	R14.07 +9.0%	14.7%	R17.00	R10.00	n/a	7
Aug ’25	R12.13	R14.66 +20.9%	8.1%	R16.50	R12.75	n/a	6
Jul ’25	R12.60	R14.31 +13.6%	10.9%	R16.50	R12.00	n/a	6
Jun ’25	R10.63	R14.31 +34.6%	10.9%	R16.50	R12.00	n/a	6
May ’25	R11.02	R14.41 +30.8%	8.9%	R16.50	R12.52	n/a	6
Apr ’25	R11.75	R14.73 +25.4%	5.7%	R16.00	R13.50	n/a	5
Mar ’25	R12.20	R14.81 +21.4%	6.0%	R16.00	R13.50	n/a	5
Feb ’25	R12.53	R14.87 +18.7%	5.0%	R16.00	R14.00	n/a	5
Jan ’25	R13.06	R14.95 +14.5%	4.3%	R16.00	R14.00	n/a	5
Dec ’24	R11.70	R14.95 +27.8%	4.3%	R16.00	R14.00	n/a	5
Nov ’24	R12.04	R14.88 +23.6%	4.5%	R16.00	R14.00	R12.29	5
Oct ’24	R12.06	R14.40 +19.4%	9.2%	R16.00	R12.08	R13.47	5
Sep ’24	R12.74	R14.40 +13.0%	9.2%	R16.00	R12.08	R12.90	5
Aug ’24	R13.03	R13.97 +7.2%	11.6%	R16.00	R11.89	R12.13	4
Jul ’24	R12.12	R13.97 +15.3%	11.6%	R16.00	R11.89	R12.60	4
Jun ’24	R10.95	R13.97 +27.6%	11.6%	R16.00	R11.89	R10.63	4
May ’24	R11.62	R14.22 +22.4%	13.7%	R17.00	R11.89	R11.02	4
Apr ’24	R11.80	R14.22 +20.5%	13.7%	R17.00	R11.89	R11.75	4
Mar ’24	R12.00	R13.94 +16.1%	16.3%	R17.00	R10.95	R12.20	4
Feb ’24	R11.88	R13.94 +17.3%	16.3%	R17.00	R10.95	R12.53	4
Jan ’24	R10.46	R14.23 +36.0%	16.9%	R17.00	R10.95	R13.06	4
Dec ’23	R10.49	R14.44 +37.6%	16.1%	R17.00	R10.95	R11.70	4
Nov ’23	R10.31	R14.27 +38.4%	18.1%	R17.00	R10.27	R12.04	4

Analyst Forecast: Target price is less than 20% higher than the current share price.