- If you are wondering whether Jackson Financial's current share price really reflects its value, you are not alone and this article is here to unpack that question clearly.
- The stock most recently closed at US$113.74, with returns of 1.5% over the last 7 days, 3.0% over 30 days, 5.8% year to date, 38.0% over 1 year and 176.8% over 3 years. This naturally raises questions about how much of this performance is already priced in.
- Recent coverage has focused on Jackson Financial as investors reassess life insurance and retirement focused financial stocks and what they might offer in terms of income and capital appreciation. That context helps explain why the market is paying close attention to valuation signals rather than just headline share price moves.
- On our checks, Jackson Financial currently scores a 4 out of 6 valuation score. This suggests it screens as undervalued on most but not all measures. Next we will look at how different valuation approaches view the stock, followed by an even more practical way to think about valuation at the end of the article.
Approach 1: Jackson Financial Excess Returns Analysis
The Excess Returns model looks at how much value Jackson Financial creates over and above the return that equity investors require, rather than focusing solely on near term earnings or cash flows. It compares the company’s profitability on its equity base with the cost of that equity.
For Jackson Financial, the model uses a Book Value of $141.89 per share and a Stable EPS of $11.94 per share, based on the median return on equity from the past 5 years. The Average Return on Equity is 9.49%, while the Cost of Equity is $9.25 per share. That gap translates into an estimated Excess Return of $2.69 per share, using a Stable Book Value of $125.76 per share as a reference point from the past 5 years.
When these excess returns are projected and discounted, the Excess Returns model arrives at an intrinsic value of about $193.94 per share. Compared with the latest share price of US$113.74, this implies the stock trades at a 41.4% discount, which indicates that Jackson Financial screens as materially undervalued on this approach.
Result: UNDERVALUED
Our Excess Returns analysis suggests Jackson Financial is undervalued by 41.4%. Track this in your watchlist or portfolio, or discover 53 more high quality undervalued stocks.
Approach 2: Jackson Financial Price vs Earnings
For a profitable business like Jackson Financial, the P/E ratio is a straightforward way to link what you pay per share to the earnings that support that share price. It helps you see how much the market is willing to pay for each dollar of earnings.
What counts as a “normal” P/E depends on how investors see the company’s growth prospects and risk profile. Higher expected growth or lower perceived risk can support a higher P/E, while slower growth or higher risk usually points to a lower, more cautious multiple.
Jackson Financial currently trades on a P/E of 15.30x. That sits below the Diversified Financial industry average of 15.96x and also below the peer group average of 18.67x. Simply Wall St’s Fair Ratio for Jackson Financial is 17.26x, which is the P/E level it would expect given factors such as earnings profile, industry, profit margin, market cap and identified risks.
This Fair Ratio can be more tailored than a simple comparison with peers or the broad industry, because it accounts for company specific characteristics rather than treating all insurers and financials as the same. On this basis, Jackson Financial’s actual P/E of 15.30x is below the Fair Ratio of 17.26x. This suggests the shares may be undervalued on this metric.
Result: UNDERVALUED
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Upgrade Your Decision Making: Choose your Jackson Financial Narrative
Earlier we mentioned that there is an even better way to understand valuation. On Simply Wall St’s Community page you can use Narratives, where you and other investors connect Jackson Financial’s story to a set of forecasts and a fair value, then compare that fair value to the current price. You can see it update automatically when fresh news or earnings arrive, and even sit at very different points on the spectrum. For example, one Narrative might anchor on a cautious US$68 price target with shrinking margins and higher perceived tail risk. Another might lean on a more optimistic US$137 fair value tied to capital strength, TPG’s partnership and a higher future earnings power, giving you a clear, side by side way to decide which story you think is more realistic.
For Jackson Financial however we'll make it really easy for you with previews of two leading Jackson Financial Narratives:
Fair value used in this bullish narrative: US$137.00 per share
Implied discount to that fair value at the last close of US$113.74: about 17.0%
Revenue growth assumption used in the narrative model: 19.14%
- Analysts in this camp see long term retirement trends and the shift toward annuity solutions as a supportive backdrop for Jackson’s diversified product set.
- They highlight capital strength, risk controls and potential tail risk reduction as reasons the company could support higher earnings power over time.
- Their valuation work links these assumptions to a higher fair value range, with updated targets up to US$137 and an expectation that capital and cash flow can support that view.
Fair value used in this cautious narrative: US$100.00 per share
Implied premium to that fair value at the last close of US$113.74: about 13.7%
Revenue growth assumption used in the narrative model: 19.27%
- Analysts here focus on tail risk from variable annuity guarantees, higher lapse rates and net outflows that could pressure cash flow and earnings stability.
- They pay close attention to regulatory scrutiny around the captive reinsurer, reserve assumptions and potential balance sheet volatility.
- Their fair value anchor of US$100 reflects a view that, even with growth and solid liquidity, earnings quality and guarantee risk could limit how high the valuation should sit.
Ultimately, these two narratives give you a clear range to test your own view against. If you want to see how different investors connect their story, forecasts and fair values for Jackson Financial, you can review the full set of community views through Curious how numbers become stories that shape markets? Explore Community Narratives and decide which assumptions line up best with your own research.
Do you think there's more to the story for Jackson Financial? Head over to our Community to see what others are saying!
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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