MODEL VERDICT
The Hanover Insurance Group, Inc. (THG)
Relative Valuation•Peer multiples, Monte Carlo simulation & quality-adjusted fair value
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Composite score derived from valuation, quality, and risk factors
Quantitative model thresholds · For educational and research purposes only
Each row records the model's monthly assessment. High Conviction = the model detected notable undervaluation vs peers. Neutral = no notable divergence was found. The return column shows the actual price change over 90 days for reference. This is a quantitative observation log — not investment advice.
| Date | Assessment | Score | Price | Status | 90d Fwd Return |
|---|---|---|---|---|---|
| May 1, 2026 | MODERATE | 0.69 | $186.84 | CURRENT | — |
| Apr 24, 2026 | MODERATE | 0.67 | $177.54 | CURRENT | — |
| Apr 17, 2026 | MODERATE | 0.68 | $181.85 | CURRENT | — |
| Apr 16, 2026 | MODERATE | 0.67 | $177.15 | CURRENT | — |
| Apr 10, 2026 | MODERATE | 0.67 | $176.78 | CURRENT | — |
Historical model observations for research purposes only. Past quantitative patterns do not predict future results. Not a recommendation to buy, sell, or hold any security.
| Methodology | Fair Value | vs Current | Weight | Quality | Status |
|---|---|---|---|---|---|
| Industry Median P/E 12 industry peers | $196.22 | +5.0% | 30% | A | Peer Data |
| Price / Book 12 industry peers | $174.85 | -6.4% | 25% | B | Model Driven |
| Forward P/E 12 analyst estimates | $203.37 | +8.8% | 15% | A- | Analyst Est. |
| Dividend Yield 12 industry peers | $189.51 | +1.4% | 10% | B | Supplementary |
| Earnings Yield 12 industry peers | $196.21 | +5.0% | 8% | B | Data |
| Price / Tangible Book 12 bank peers | $180.19 | -3.6% | 5% | B+ | Bank Primary |
| Price / Sales 12 industry peers | $306.47 | +64.0% | 4% | B | Model Driven |
| EV/EBITDA 12 industry peers | $220.48 | +18.0% | 3% | A- | Peer Data |
| Weighted Output Blended model output | $242.65 | +29.9% | 100% | 81 | UNDERVALUED |
| EPS Growth ↓ | P/E Multiple → | 6× | 8× | 10× (Current) | 12× | 14× |
|---|---|---|---|---|---|
| Bear Case (6%) | $117 | $157 | $196 | $235 | $274 |
| Conservative (9%) | $122 | $162 | $203 | $243 | $284 |
| Base Case (14.5%) | $127 | $170 | $212 | $254 | $297 |
| Bull Case (20%) | $133 | $177 | $221 | $265 | $310 |
Cross-sectional regression predicting expected multiples based on growth, margins, ROIC, and beta.
| Multiple | Avg | Median | Min | Max | Std |
|---|---|---|---|---|---|
| P/E Ratio | 32.28 | 13.07 | 9.87 | 123.90 | 41.94 |
| EV/EBIT | 20.48 | 10.61 | 7.46 | 64.50 | 20.86 |
| EV/EBITDA | 26.71 | 11.05 | 7.46 | 102.33 | 34.55 |
| P/FCF | 7.68 | 6.92 | 5.57 | 12.53 | 2.48 |
| P/FFO | 28.77 | 12.42 | 9.92 | 105.37 | 35.18 |
| P/TBV | 2.36 | 2.43 | 1.47 | 3.15 | 0.57 |
| P/AFFO | 35.88 | 12.80 | 10.04 | 147.58 | 50.69 |
| P/B Ratio | 1.78 | 1.83 | 1.39 | 2.09 | 0.25 |
| Div Yield | 0.03 | 0.02 | 0.02 | 0.07 | 0.02 |
| P/S Ratio | 0.93 | 0.92 | 0.73 | 1.13 | 0.12 |
Based on our peer multiples analysis with 23 valuation metrics, the model estimates THG's fair value at $242.65 vs the current price of $186.84, implying +29.9% upside potential. Model verdict: Undervalued. Confidence: 81/100. This is a quantitative estimate, not a recommendation.
The blended fair value of $242.65 is calculated using four lenses: industry median multiples (40%), historical multiples (30%), forward estimates (20%), and quality-adjusted multiples (10%). Monte Carlo simulation (10,000 iterations) gives a range of $170.89 (P10) to $392.24 (P90), with a median of $257.54.
THG's current P/E of 10.1x compares to the industry median of 10.6x (12 peers in the group). This represents a -4.8% discount to the industry. The historical average P/E is 32.3x over 7 years. Signal: Fair Value.
22 analysts cover THG with a consensus rating of Buy. The consensus price target is $202.33 (range: $195.00 — $212.00), implying +8.3% upside from the current price. Grade breakdown: Strong Buy (0), Buy (13), Hold (9), Sell (0), Strong Sell (0).
The model confidence score is 81/100, based on: data completeness (30), peer quality (25), historical depth (20), earnings stability (4), and model agreement (2). Cyclicality penalty: -0 points. The model shows strong agreement across inputs.
The model flags several key risks: (1) Margin reversion: Current net margin of 10.8% is 4.5 percentage points above the 7-year average (6.3%), with a Z-score of +1.3σ. If margins normalize, fair value could drop to ~$347. (2) Macro/regulatory risks are not captured in this model but remain material.
Peak earnings risk refers to the possibility that THG's current profitability is above its sustainable long-term trend. The model detects a margin Z-score of +1.3σ, meaning margins are 1.3 standard deviations above their historical average. If margins revert to the 7-year mean (6.3%), the model estimates fair value drops by 8560.0% to approximately $347. This isn't a prediction — it's a scenario analysis.
No. This dashboard is a quantitative research tool for educational and informational purposes only. It is not investment advice, a solicitation, or a recommendation to buy, sell, or hold any security. The operator of this platform is not a registered investment advisor (RIA), broker-dealer, or financial planner. All model outputs, fair value estimates, signals, and scenarios are the result of automated quantitative computations and should not be construed as professional financial guidance. You should consult a qualified, licensed financial advisor before making any investment decisions. Past model performance is not indicative of future results.