• If you are wondering whether F&G Annuities & Life is attractively priced or just looks cheap on the surface, its recent share performance gives a few clues worth unpacking.
• The stock last closed at US$27.08, with a 10.1% gain over the past month but a 9.0% decline over the last year and a 9.9% decline year to date, which may leave you questioning whether sentiment or fundamentals are in the driving seat.
• Recent coverage of F&G Annuities & Life has focused on its position as a listed insurer and annuity provider, including commentary on how investors are weighing its business mix and market positioning. This context helps explain why the stock has seen both shorter term strength and weaker longer term returns as the market reassesses risk and return expectations.
• On Simply Wall St's valuation checks, F&G Annuities & Life scores 2 out of 6, which sets up a closer look at how different valuation methods assess the stock today and hints at an even broader way to think about valuation that will be covered at the end of this article.

F&G Annuities & Life scores just 2/6 on our valuation checks. See what other red flags we found in the full valuation breakdown.

Approach 1: F&G Annuities & Life Excess Returns Analysis

The Excess Returns model looks at how much profit a company can earn above the return that equity investors require, then converts that stream of excess profit into an estimated value per share.

For F&G Annuities & Life, the model uses a Book Value of $34.88 per share and a Stable EPS of $2.07 per share, based on the median return on equity from the past 5 years. The estimated Cost of Equity is $2.21 per share, which implies an Excess Return of $0.14 per share below that required level. The Average Return on Equity used in the model is 6.65%, while the Stable Book Value assumption is $31.16 per share, based on the median book value over the same period.

Putting these inputs together, the Excess Returns model produces an intrinsic value of about $27.15 per share. Versus the recent share price of $27.08, this points to an implied discount of roughly 0.3%. On this method, the stock screens as very close to its estimated intrinsic value.

Result: ABOUT RIGHT

F&G Annuities & Life is fairly valued according to our Excess Returns, but this can change at a moment's notice. Track the value in your watchlist or portfolio and be alerted on when to act.

Approach 2: F&G Annuities & Life Price vs Earnings

P/E is a common way to value profitable companies because it links what you pay for the stock directly to the earnings the business is generating today. For investors, it is a quick sense check of how much the market is willing to pay for each dollar of earnings.

What counts as a normal or fair P/E ratio typically reflects how the market views a company’s growth prospects and risk. Higher expected growth or lower perceived risk can support a higher P/E, while lower expected growth or higher perceived risk usually go with a lower P/E.

F&G Annuities & Life currently trades on a P/E of 6.96x. This sits above the peer group average of 4.32x, but below the wider Insurance industry average of 11.18x. Simply Wall St’s Fair Ratio is a proprietary estimate of what the P/E might be given factors such as the company’s earnings profile, profit margins, industry, market cap and risk, providing a more tailored yardstick than a simple peer or sector comparison.

Because the Fair Ratio incorporates these company specific drivers, it can offer a more targeted view of whether the current 6.96x multiple looks stretched or conservative. In this case, without a Fair Ratio figure to compare against, the P/E alone does not clearly indicate whether the stock is materially undervalued or overvalued.

Result: ABOUT RIGHT

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Upgrade Your Decision Making: Choose your F&G Annuities & Life Narrative

Earlier it was mentioned that there is an even better way to understand valuation. Meet Narratives, which let you attach a clear story about F&G Annuities & Life to the numbers by linking your view on its future revenue, earnings and margins to a financial forecast and then to a fair value. This is all available within an easy tool on Simply Wall St's Community page that is used by millions of investors. There you can see how different investors interpret the same facts, such as one Narrative that expects F&G Annuities & Life to justify a fair value closer to the higher US$47.00 analyst target and another that only supports a value near the lower US$39.00 target. You can compare each fair value with the current share price to help decide whether the stock looks attractive or not based on your assumptions, and have those Narratives update automatically as new earnings, news or other data points are added.

Do you think there's more to the story for F&G Annuities & Life? 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.