Is Cincinnati Financial Corporation (CINF) overvalued?
On Equity Rank's model estimate, CINF trades close to its fair value (2% above it). Cincinnati Financial Corporation (CINF) last closed at $185.48; the multi-method model fair value is $181.57.
| Price | Model fair value | Price vs model |
|---|---|---|
| $185.48 | $181.57 | 2% above |
What the answer rests on
- 4 of 11 valuation methods put CINF's value above its price and 7 put it below, so the methods disagree.
- To justify today's price, CINF's free cash flow would need to grow about -7.4% a year for ten years (a reverse discounted cash flow). Over the last three years it actually grew 14.9% a year.
- CINF trades at 11.2 times its last year's earnings, against a median of 13.1 for 75 profitable Insurance companies.
- Over the past year the price sat below the model fair value on 72% of trading days. The gap ranged from 26% below to 14% 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 CINF's fair value · What prices assume · Other companies