...

The Travelers Companies, Inc. (TRV) Intrinsic Value

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

Popular:

The Travelers Companies, Inc. (TRV)

View Full Profile →

Intrinsic Value (DCF)

Current$271.34
→
Intrinsic$570.97
+110%
$371.99$570.97$966.74
Market implies 1% growth for 5 years
DCF analysis suggests TRV could have 110% upside at 17% growth — verify assumptions match your view.
At $271, the market prices in only 1% growth — below historical 17%, suggesting low expectations.
Range: Bear $372 → Bull $967. Current price implies expectations below the bear case — very conservative expectations.
Discount ↓Growth →13%15%17%19%
8%$720$785$854$928
10%$482$525$571$620
12%$356$388$422$458
14%$279$304$330$358

Bull Case

  • Bull case ($967) offers 256% upside at 20% growth, 8% discount
  • Price below even worst-case scenario — strong margin of safety
  • Market-implied growth (1%) ≤ historical CAGR (17%)

Bear Case

  • Bear case ($372) with 13% growth, 12% discount rate
Loading charts...

5-Year Net Income Projection

Year 1$5.83B
Year 2$6.81B
Year 3$7.94B
Year 4$9.27B
Year 5$10.82B
Terminal$171.45B

📐 Model Inputs

Growth Rate16.7%5Y CAGR (cascade: 5Y→3Y→TTM)
Discount Rate9.5%WACC estimate
Terminal Growth3.0%Perpetuity rate
Base Net Income$5.00BTTM 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.

Related Analysis

Full Stock ProfileCompare TRV vs BRK.BStock Screener

Frequently Asked Questions

Is TRV stock undervalued or overvalued?
🟢 UNDERVALUED

TRV trades at $271.34 vs. our DCF-derived intrinsic value of $570.97, implying +100% upside. At a 9.5% WACC and 16.7% projected FCF growth, the market appears to be underpricing the present value of TRV's future cash flows. The bear case ($366.66) still suggests upside, providing margin of safety.

What is TRV's intrinsic value?

Using a 5-year DCF model: Base FCF of $5.00B, projected at 16.7% 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 $7.33B net debt and dividing by 0.23B shares: Bear $366.66 | Base $570.97 | Bull $874.26. Current price $271.34 implies +100% to base case.

How is TRV's fair value calculated?

DCF Methodology:

① Project FCF years 1-5 using 16.7% 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 ($139.29B).

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: 27.9x.