Fairfax Financial Holdings Ltd FRFXF

Primary Symbol: T.FFH Alternate Symbol(s): T.FFH.PR.M | FRFFF | T.FFH.PR.C | FAXRF | FRFGF | T.FFH.PR.D | FFHPF | FAXXF | FXFHF | FRFHF | T.FFH.PR.E | FXFLF | T.FFH.PR.F | T.FFH.PR.G | T.FFH.PR.H | T.FFH.PR.I | FRFZF | T.FFH.PR.J | T.FFH.PR.K

Financial Services Insurance - Property & Casualty

Fairfax Financial Holdings Limited is a Canada-based holding company. The Company, through its subsidiaries, is engaged in property and casualty insurance and reinsurance and the associated investment management. The Company’s segments include Property and Casualty Insurance and Reinsurance, Life insurance and Run-off and Non-insurance companies. The Property and Casualty Insurance and Reinsurance segment includes North American Insurers, Global Insurers and Reinsurers and International Insurers and Reinsurers. The Life Insurance and Run-off segment include Eurolife and Run-off. The Non-insurance companies segment includes restaurants and retail, Fairfax India, Thomas Cook India and others. Eurolife underwrites traditional life insurance policies (endowments, deferred annuities, whole life and term life), group benefits, including retirement benefits, and accident and health insurance policies. The North American Insurers include Northbridge, Crum & Forster and Zenith National.

TSX:FFH - Post by User

Fairfax Financial Holdings Ltd

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Post by retiredcfon May 02, 2022 9:46am

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Post# 34647189

RBC Report

Their upside scenario target is US$975.00. Unable to post it all as the cutting and pasting is a real pain with this one. GLTA

April 29, 2022

Outperform

TSX: FFH.U; USD 543.21; TSX: FFH

Price Target USD 750.00 ↑ 675.00

Fairfax Financial Holdings Limited

Underwriting results continue to improve, a shift towards more yield in investment portfolio

Our view: The hard market continues to drive strong top-line growth and improved underwriting margins and management did an excellent job of protecting book value as interest rates rose, positioning them for improved investment results going forward. While the portfolio remains complex, the value positioning seems well suited to current market conditions. With underwriting contributions improving and the balance sheet as well positioned as we've seen it in some time, we see significant room for multiple expansion and continue to view FFH shares as a best-in-class value opportunity at about 0.85x book value.

Key points:

Estimates: We are lowering our 2022 net income estimate to $54.95 from $67.50, which primarily reflects the results in the quarter partly offset by improving investment income. Our 2023 estimate rises to $75.00 from $73.75, also reflecting higher investment income partly offset by more conservative margin assumptions. On an operating basis, we are revising our estimate to $55.19 from $55.78 for 2022 and to $63.29 from $62.05 for 2023.

Price target: We are increasing our price target to $750 from $675 (about C$950, up from C$875 at a 1.27:1 exchange rate). Our target remains based on 1.0x book value, which we now apply to ending 2023 book versus 2022 book previously. With good visibility to further book value growth together with a company generating underwriting profits in the middle of a hard market, we think 1.0x book value is a very attractive multiple.

1Q results:

Reported 1Q22 net earnings per share of $4.49 vs. $28.91 last year and our $17.72 estimate. Results included $214 million of net realized and unrealized losses on investments. On an operating basis, which excludes these items, the company earned $13.51 per share (RBC forecast was $14.78). Better than forecast underwriting results were offset by weaker than forecast associate losses.

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