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Cincinnati Financial Corporation (CINF) Intrinsic Value

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

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Cincinnati Financial Corporation (CINF)

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Intrinsic Value (DCF)

Current$163.37
→
Intrinsic$264.43
+62%
$181.16$264.43$422.73
Market implies 1% growth for 5 years
DCF analysis suggests CINF could have 62% upside at 8% growth — verify assumptions match your view.
At $163, the market prices in only 1% growth — below historical 8%, suggesting low expectations.
Range: Bear $181 → Bull $423. Current price implies expectations below the bear case — very conservative expectations.
Discount ↓Growth →4%6%8%10%
8%$313$342$373$405
10%$224$243$264$287
12%$174$189$204$221
14%$142$154$166$180

Bull Case

  • Bull case ($423) offers 159% upside at 10% growth, 9% discount
  • Price below even worst-case scenario — strong margin of safety
  • Market-implied growth (1%) ≤ historical CAGR (8%)

Bear Case

  • Bear case ($181) with 6% growth, 12% discount rate
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5-Year Net Income Projection

Year 1$2.48B
Year 2$2.67B
Year 3$2.89B
Year 4$3.12B
Year 5$3.37B
Terminal$49.55B

📐 Model Inputs

Growth Rate8.0%5Y CAGR (cascade: 5Y→3Y→TTM)
Discount Rate10.0%WACC estimate
Terminal Growth3.0%Perpetuity rate
Base Net Income$2.29BTTM 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 CINF stock undervalued or overvalued?
🟢 UNDERVALUED

CINF trades at $163.37 vs. our DCF-derived intrinsic value of $264.43, implying +63% upside. At a 10.0% WACC and 8.0% projected FCF growth, the market appears to be underpricing the present value of CINF's future cash flows. The bear case ($191.74) still suggests upside, providing margin of safety.

What is CINF's intrinsic value?

Using a 5-year DCF model: Base FCF of $2.29B, projected at 8.0% 5Y CAGR (best of revenue, EPS, or FCF growth), discounted at 10.0% WACC, with 3.0% terminal growth. Terminal value calculated via Gordon Growth Model: TV = FCF₅ × (1+g) / (WACC−g). After deducting $-108M net debt and dividing by 0.16B shares: Bear $191.74 | Base $264.43 | Bull $361.63. Current price $163.37 implies +63% to base case.

How is CINF's fair value calculated?

DCF Methodology:

① Project FCF years 1-5 using 8.0% 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=10.0%.

④ Sum PV of explicit period + PV of terminal value = Enterprise Value ($41.62B).

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: 18.2x.