- If you are wondering whether Hartford Insurance Group's current share price still reflects good value, this article walks through what the numbers actually say rather than relying on headlines or hype.
- The stock last closed at US$132.93, with a 4.5% decline over the past week and a 6.4% decline over the past month, while the 1 year return stands at 13.7% and the 3 and 5 year returns are 114.1% and 117.3% respectively.
- Recent coverage around Hartford Insurance Group has focused on the company more broadly, which helps explain why some investors are reassessing both upside potential and risk after the strong multi year performance. This mix of shorter term pullback and longer term gains is exactly why a closer look at what the stock might be worth today can be useful.
- On our valuation checks, Hartford Insurance Group scores 5 out of 6 for being undervalued, giving it a value score of 5. Next, we will compare different valuation approaches before finishing with an even richer way to think about what "fair value" really means.
Approach 1: Hartford Insurance Group Excess Returns Analysis
The Excess Returns model looks at how much value Hartford Insurance Group may create above the return that shareholders are assumed to require. Instead of focusing on short term swings, it compares the company’s profitability on its equity base with the estimated cost of that equity.
For Hartford Insurance Group, analysts estimate a stable earnings figure of about $14.64 per share on a book value of $67.33 per share, implying an average return on equity of 18.03%. The model assumes a cost of equity of $5.67 per share, which leaves an estimated excess return of $8.98 per share. Analysts also project a stable book value of $81.19 per share, which is used to extend those excess returns into the future.
When those excess returns are capitalized in the Excess Returns Model, Simply Wall St arrives at an intrinsic value estimate of about $332.74 per share. Compared with the recent share price of $132.93, this framework suggests the stock trades at a 60.1% discount, which indicates it is materially undervalued on this measure.
Result: UNDERVALUED
Our Excess Returns analysis suggests Hartford Insurance Group is undervalued by 60.1%. Track this in your watchlist or portfolio, or discover 48 more high quality undervalued stocks.
Approach 2: Hartford Insurance Group Price vs Earnings
For a profitable company like Hartford Insurance Group, the P/E ratio is a straightforward way to connect what you pay for the stock with what the business currently earns per share. In general, higher growth expectations or lower perceived risk can support a higher “normal” P/E ratio, while slower growth or higher risk tends to line up with a lower one.
Hartford Insurance Group currently trades on a P/E of 9.61x. That sits slightly below the peer average of 9.69x and also below the broader Insurance industry average P/E of 11.35x. Simply Wall St’s proprietary “Fair Ratio” for Hartford Insurance Group is 12.24x, which is an estimate of what the P/E might be given factors such as earnings growth, profit margins, industry, market cap and specific risks.
This Fair Ratio aims to be more tailored than a simple peer or industry comparison because it adjusts for the company’s own profile rather than assuming that all insurers deserve similar multiples. Comparing the Fair Ratio of 12.24x with the current P/E of 9.61x indicates the stock may be undervalued on this P/E based approach.
Result: UNDERVALUED
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Upgrade Your Decision Making: Choose your Hartford Insurance Group 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 write the story you believe about Hartford Insurance Group, link that story to your own forecast for revenue, earnings and margins, and then compare the Fair Value from your Narrative with the current price. The system updates your view automatically when new news or earnings arrive. One investor might build a Narrative closer to the higher US$163 fair value, while another uses the same tools and data to land nearer US$120, and both can clearly see whether their own view says the stock looks cheap or expensive today.
Do you think there's more to the story for Hartford Insurance Group? 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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