Is Chubb Ltd (CB) overvalued?
On Equity Rank's model estimate, CB trades 12% above its fair value. Chubb Ltd (CB) last closed at $365.02; the multi-method model fair value is $324.59.
| Price | Model fair value | Price vs model |
|---|---|---|
| $365.02 | $324.59 | 13% above |
What the answer rests on
- 3 of 12 valuation methods put CB's value above its price and 9 put it below, so the methods mostly agree.
- To justify today's price, CB's free cash flow would need to grow about -10.0% a year for ten years (a reverse discounted cash flow). Over the last three years it actually grew 8.9% a year.
- CB trades at 13.1 times its last year's earnings, against a median of 13.0 for 75 profitable Insurance companies.
- Over the past year the price sat below the model fair value on 17% of trading days. The gap ranged from 6% below to 15% above the model fair value.
Read this before relying on it
The model fair value is an estimate from published financial statements. It is not a forecast of where the price goes, and it can be wrong. Within 10% either side we call it close to fair value: valuation models are not precise enough to read more into a smaller gap. Our own lists have no proven edge over the market yet; the live record shows every result, misses included.
Every valuation method behind CB's fair value · What prices assume · Other companies