Sun Life Financial Inc. (SLF)
Valuation Overview•Is Sun Life Financial Inc. Overvalued or Undervalued?
Trading at a discount across both intrinsic cash flow and relative peer multiples, indicating a strong margin of safety.
Moderate quality score of 66/100, reflecting stable operating margins and manageable leverage.
Wall Street forecasts a balanced outlook with consensus price targets near the current price.
Verdict: Solid fundamental quality, though solvency presents a headwind.
Wall Street sentiment is generally neutral. This outlook is strongly supported by highly attractive capital returns, driven by a balanced mix of reliable dividends and share buybacks.
SLF demonstrates strong business quality with robust profitability and healthy margins. However, the balance sheet carries elevated leverage, requiring careful monitoring of debt servicing capabilities.
The company is driving exceptional top-line expansion (130.8% 3Y CAGR) paired with stable bottom-line earnings. Operating efficiency remains adequate with margins around 10.6%.
| Financial Metric | Trend (12Q) | Latest Qtr | 1Y Growth | 3Y CAGR | 5Y CAGR | 10Y CAGR |
|---|---|---|---|---|---|---|
| Revenue | $8.9B | +22.3% | +130.8% | -0.5% | +8.1% | |
| EBITDA | $797.1M | — | +8.6% | — | — | |
| Net Income | $537.4M | +18.0% | +7.4% | — | +5.0% | |
| EPS (Diluted) | $0.84 | +16.7% | +7.9% | +8.6% | +5.6% | |
| Free Cash Flow | $4.1B | +469.4% | +19.4% | +7.1% | — |
| Metric | TTM | 3Y Avg | 5Y Avg | 10Y Avg |
|---|---|---|---|---|
| Gross Margin | 52.0% | 42.0% | 57.2% | 45.4% |
| Operating Margin | 10.6% | 11.6% | 31.0% | 20.5% |
| Net Margin | 8.3% | 9.1% | 25.5% | 17.1% |
| FCF Margin | 28.7% | 20.1% | 57.6% | 34.9% |
| Quarter | EPS Est. | EPS Act. | Surprise | EPS | Rev |
|---|---|---|---|---|---|
| Q2'26Latest | $1.35 | $1.38 | +2.2% | ||
| Q1'26 | $1.35 | $1.41 | +4.4% | ||
| Q4'25 | $1.30 | $1.35 | +3.8% | ||
| Q3'25 | $1.29 | $1.29 | +0.0% | ||
| Q2'25 | $1.22 | $1.27 | +4.1% | ||
| Q1'25 | $0.90 | $1.20 | +32.9% | ||
| Q4'24 | $1.22 | $1.27 | +4.1% | ||
| Q3'24 | $1.18 | $1.25 | +5.9% |
Total return is +27.4% (1Y), outperforming the benchmark by +2.4%
| Period | Total Return | vs S&P 500 (Alpha) | Dividend Contribution |
|---|---|---|---|
| YTD | +27.8% | +18.5% | — |
| 1Y | +27.4% | +2.4% | +4.1% |
| 3YCAGR | +19.7% | -0.3% | +14.6% |
| 5YCAGR | +12.6% | -0.5% | +23.1% |
| 10YCAGR | +11.2% | -2.4% | — |
The S&P 500 is at 31.3x trailing P/E — Expensive relative to historical averages.
Quick answers to common questions about Sun Life Financial Inc. (SLF) valuation, health, and returns.
Sun Life Financial Inc. is estimated to be undervalued under our discounted cash flow framework. relative multiples indicate the stock is Cheap versus peers compared to industry peers. undervalued (implying +19.7% upside to DCF intrinsic value of $94.47)
Sun Life Financial Inc. has multiple valuation anchors: DCF Intrinsic Value: $94.47 | Peer Relative Fair Value: $103.09 | Wall Street Analyst Target: $81.00 (implying +2.6% upside). A convergence of these signals offers higher conviction.
Sun Life Financial Inc. displays good financial health with a composite quality score of 66/100, supported by a Piotroski F-Score of 7/9, Return on Invested Capital (ROIC) of 10.2%.
Sun Life Financial Inc. pays a 3.2% dividend yield, covered by a 55% payout ratio with 4 years of growth, supplemented by a 2.8% buyback yield.
Sun Life Financial Inc.'s current growth trajectory is Decelerating. The company achieved +22.3% 1Y revenue growth and +16.7% 1Y EPS growth, compared to its 3Y revenue CAGR of +130.8%.
Wall Street consensus is Hold based on 15 analysts, beating EPS expectations in 75% of recent quarters with a 3-quarter streak. The consensus price target represents a +2.6% change from current levels.
Investment risks for Sun Life Financial Inc. include: -14.9% 1-year max drawdown. Volatility risk is characterized by a beta of 0.37x.
No. These computations are purely quantitative model outputs for informational purposes. They do not account for qualitative management shifts or macro events. Always consult a licensed RIA before buying or selling shares.
Disclaimer: This page is for informational purposes only and does not constitute financial advice. All valuation models, scores, and target estimates are automated computations under stated assumptions and should not be relied upon as the sole basis for any investment decision.