Using the industry peer median P/E multiple (trailing + forward), Arch Capital Group Ltd. (ACGL) has a fair value of $145.54 based on 5 comparable companies in the Insurance - Diversified industry.
USD in millions except Fair Price. Subject company highlighted.
| Mkt Cap ($M) | Trailing P/E | Forward P/E | |
|---|---|---|---|
| Arch Capital Group Ltd.ACGL | 35,336 | 8.1x | 10.6x |
| American International Group, Inc.AIG | 40,247 | 13.7x | 14.8x |
| The Hartford Financial Services Group, Inc.HIG | 37,604 | 10.1x | 13.5x |
| State Street CorporationSTT | 35,163 | 13.4x | 12.4x |
| Willis Towers Watson Public Limited CompanyWTW | 27,487 | 17.7x | 17.2x |
| W. R. Berkley CorporationWRB | 24,743 | 14.6x | 16.1x |
| Industry Median | 13.7x | 14.8x | |
| (*) Profit after tax | 4,399 | 3,320 | |
| Equity Value | 60,428 | 49,051 | |
| (/) Outstanding shares | 376 | 376 | |
| Fair Price | $161 | $130 | |
This P/E relative valuation uses the industry peer median Price-to-Earnings ratio to estimate fair value. Both trailing (last 12 months) and forward (next fiscal year analyst estimates) P/E multiples are computed independently.
The industry median trailing P/E is applied to the company's TTM net income, and the forward P/E to analyst-estimated net income. Each produces an equity value divided by shares outstanding to yield a fair price per share. The selected fair value is the average of the trailing and forward legs.