• Investors may be wondering if Hartford Insurance Group at about US$140 per share still offers value, or if most of the upside is already reflected in the price.
• The stock most recently closed at US$140.40, with returns of 3.1% over 7 days, 2.3% over 30 days, 2.4% year to date, 24.4% over 1 year, 109.8% over 3 years and 132.2% over 5 years. These figures may influence how you think about risk and reward today.
• Recent news coverage has focused on Hartford Insurance Group's position within the broader insurance sector and how investors are assessing its long term prospects. This context is important because sentiment around the sector often shapes how much investors are willing to pay for each dollar of earnings or book value.
• Simply Wall St currently gives Hartford Insurance Group a valuation score of 4 out of 6. This sets up a closer look at how different valuation methods compare and hints at an even more complete way to think about fair value later in this article.

Approach 1: Hartford Insurance Group Excess Returns Analysis

The Excess Returns model estimates what Hartford Insurance Group might be worth by comparing the return it is expected to earn on shareholder equity with the cost of that equity. In simple terms, it looks at how much value the company could create over and above what investors require for the risk they take.

For Hartford Insurance Group, the key inputs are:

• Book Value: US$67.33 per share
• Stable EPS: US$14.72 per share (source, weighted future Return on Equity estimates from 9 analysts)
• Cost of Equity: US$5.69 per share
• Excess Return: US$9.02 per share
• Average Return on Equity: 18.04%
• Stable Book Value: US$81.59 per share (source, weighted future Book Value estimates from 9 analysts)

By capitalising these expected excess returns, the model arrives at an intrinsic value of about US$334.46 per share. Against a recent share price of about US$140, this suggests the stock could be around 58.0% undervalued under these assumptions.

Result: UNDERVALUED

Our Excess Returns analysis suggests Hartford Insurance Group is undervalued by 58.0%. Track this in your watchlist or portfolio, or discover 62 more high quality undervalued stocks.

Approach 2: Hartford Insurance Group Price vs Earnings

P/E is a useful gauge for a profitable insurer because it links what you pay directly to the earnings that support that valuation. For you as an investor, a higher or lower P/E often reflects how the market is weighing growth expectations and risk, with faster expected growth or lower perceived risk usually justifying a higher “normal” or “fair” P/E.

Hartford Insurance Group currently trades on a P/E of 10.15x. That sits slightly above the peer average of 9.79x, but below the broader Insurance industry average of about 11.54x. On the surface, that suggests the stock is priced between its direct peers and the wider group of insurers.

Simply Wall St’s Fair Ratio for Hartford Insurance Group is 11.62x. This is a proprietary estimate of what the P/E might be, given factors such as earnings growth, profit margins, industry, market cap and specific risks. Because it blends these company specific drivers, the Fair Ratio can give you a more tailored anchor than a simple comparison with peers or the industry alone. Setting this Fair Ratio against the actual P/E of 10.15x points to the shares trading below that fair level.

Result: UNDERVALUED

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Upgrade Your Decision Making: Choose your Hartford Insurance Group Narrative

Earlier the article mentioned that there is an even better way to think about valuation, and that is where Narratives come in. They let you set out your story for Hartford Insurance Group, connect that story to a simple forecast for revenue, earnings and margins, and then see a fair value that updates automatically on Simply Wall St’s Community page whenever new news or earnings arrive. You can then compare that fair value to today’s price and decide whether the stock looks attractive or expensive based on your own view, not just the averages. For example, one investor might build a Narrative close to the most bullish analyst case, assuming Hartford Insurance Group reaches the US$163.00 price target with earnings of US$4.1b and a P/E of 11.4x by 2029. Another might lean closer to the most cautious US$135.00 price target if more weight is placed on risks like catastrophe losses or competition. Seeing those different Narratives side by side can make it easier for you to choose which story you think is more realistic.

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.