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Chubb Limited (CB) Intrinsic Value

DCF-based fair value calculation with Bear, Base, and Bull scenarios

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Chubb Limited (CB)

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Intrinsic Value (DCF)

Current$301.11
→
Intrinsic$641.72
+113%
$419.23$641.72$1,084.14
Market implies 1% growth for 5 years
DCF analysis suggests CB could have 113% upside at 19% growth — verify assumptions match your view.
At $301, the market prices in only 1% growth — below historical 19%, suggesting low expectations.
Range: Bear $419 → Bull $1084. Current price implies expectations below the bear case — very conservative expectations.
Discount ↓Growth →15%17%19%21%
8%$812$883$960$1041
10%$544$591$642$696
12%$402$437$474$514
14%$315$342$371$402

Bull Case

  • Bull case ($1084) offers 260% upside at 22% growth, 8% discount
  • Price below even worst-case scenario — strong margin of safety
  • Market-implied growth (1%) ≤ historical CAGR (19%)

Bear Case

  • Bear case ($419) with 15% growth, 12% discount rate
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5-Year Net Income Projection

Year 1$10.99B
Year 2$13.02B
Year 3$15.43B
Year 4$18.29B
Year 5$21.68B
Terminal$343.48B

📐 Model Inputs

Growth Rate18.5%5Y CAGR (cascade: 5Y→3Y→TTM)
Discount Rate9.5%WACC estimate
Terminal Growth3.0%Perpetuity rate
Base Net Income$9.27BTTM actual
Bear g×0.8, r+2%
Base Historical CAGR
Bull g×1.2, r−1.5%
ℹ️

DCF estimates based on historical growth rates extrapolated forward. Uses Net Income (FCF not meaningful for insurers). See FAQ below for full methodology.

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Frequently Asked Questions

Is CB stock undervalued or overvalued?
🟢 UNDERVALUED

CB trades at $301.11 vs. our DCF-derived intrinsic value of $554.87, implying +79% upside. At a 9.5% WACC and 18.5% projected FCF growth, the market appears to be underpricing the present value of CB's future cash flows. The bear case ($361.45) still suggests upside, providing margin of safety.

What is CB's intrinsic value?

Using a 5-year DCF model: Base FCF of $9.27B, projected at 18.5% 5Y CAGR (best of revenue, EPS, or FCF growth), discounted at 9.5% WACC, with 3.0% terminal growth. Terminal value calculated via Gordon Growth Model: TV = FCF₅ × (1+g) / (WACC−g). After deducting $13.00B net debt and dividing by 0.41B shares: Bear $361.45 | Base $554.87 | Bull $838.38. Current price $301.11 implies +79% to base case.

How is CB's fair value calculated?

DCF Methodology:

① Project FCF years 1-5 using 18.5% growth derived from 5-year historical CAGR (best of revenue, EPS, or FCF growth, with 8% floor and 25% cap).

② Calculate terminal value at year 5 using perpetuity growth model with g=3.0%.

③ Discount all cash flows to PV using WACC=9.5%.

④ Sum PV of explicit period + PV of terminal value = Enterprise Value ($241.55B).

⑤ Subtract net debt, divide by shares outstanding.

Sensitivity analysis available above—adjust WACC ±2% or growth ±3% to stress-test the valuation. Implied EV/FCF multiple: 26.1x.