• If you are wondering whether Hartford Insurance Group at around US$134.45 is offering fair value or a margin of safety, you are in the right place.
• The stock has been choppy in the short term, with a 3.9% decline over the last 7 days, a modest 1.6% return over 30 days, and a 1.9% year to date decline, while the 1 year return sits at 15.1% and the 3 year and 5 year returns are 100.5% and 125.5% respectively.
• These moves have kept Hartford on the radar for investors watching insurers, especially as broader market sentiment and sector specific headlines continue to shift. While there has not been a single defining recent event mentioned here, this mix of shorter term softness and longer term gains is shaping how investors think about the stock today.
• On Simply Wall St’s 6 point valuation framework, Hartford scores 5 out of 6. Next, you will see how traditional approaches like P/E and discounted cash flow compare, before finishing with a broader way to think about value that ties all of these checks together.

Approach 1: Hartford Insurance Group Excess Returns Analysis

The Excess Returns model looks at how much profit a company is expected to generate above the return that equity investors require, and then converts those future excess profits into a per share value today.

For Hartford Insurance Group, the model starts with an estimated Book Value of $67.50 per share and a Stable Book Value of $81.04 per share, based on weighted future book value estimates from 10 analysts. Stable EPS is set at $14.44 per share, sourced from weighted future return on equity estimates from the same analyst group.

The Cost of Equity is $5.66 per share, which implies an Excess Return of $8.78 per share. That excess is supported by an Average Return on Equity of 17.81%, which is the key driver behind the Excess Returns outcome for Hartford.

Putting these inputs together, the Excess Returns model points to an estimated intrinsic value of about $327.15 per share. Compared with a current share price around $134.45, this suggests the stock is 58.9% undervalued on this framework.

Result: UNDERVALUED

Our Excess Returns analysis suggests Hartford Insurance Group is undervalued by 58.9%. Track this in your watchlist or portfolio, or discover 54 more high quality undervalued stocks.

Approach 2: Hartford Insurance Group Price vs Earnings

For a profitable insurer like Hartford Insurance Group, the P/E ratio is a useful shorthand for how much investors are paying for each dollar of current earnings. What tends to sit behind a "normal" or "fair" P/E is a mix of earnings growth expectations and risk, with higher growth or lower perceived risk often supporting higher multiples, and the reverse also holding true.

Hartford currently trades on a P/E of 9.12x. This sits below the Insurance industry average P/E of 11.59x and slightly below the peer average of 9.57x. Simply Wall St’s Fair Ratio for Hartford, which is 11.20x, goes a step further. It is a proprietary estimate of what Hartford’s P/E might be based on factors such as its earnings growth profile, profit margins, risk indicators, industry, and market capitalization, rather than just a simple comparison with peers.

Because the Fair Ratio builds in these company specific drivers, it can give a more tailored view than using industry or peer averages alone. With Hartford’s current P/E of 9.12x sitting below the Fair Ratio of 11.20x, the shares screen as undervalued on this multiple based approach.

Result: UNDERVALUED

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Upgrade Your Decision Making: Choose your Hartford Insurance Group Narrative

Earlier it was mentioned that there is an even better way to understand valuation. Narratives on Simply Wall St let you link your view of Hartford Insurance Group’s story to a financial forecast and a fair value by turning your assumptions about future revenue, earnings, margins and an appropriate P/E into a fair value that you can compare with today’s price. This updates automatically when fresh news or earnings arrive. One investor might build a Narrative that lines up with the higher analyst fair value of about US$163.00, while another might prefer the more cautious US$135.00 view. You can see these different Narratives side by side on the Community page and decide which story, and which fair value range, makes most sense to you.

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.