Chubb LimitedCBNYSE

Overview Intelligence Charts News Fundamentals Key Metrics TTM Financials Earnings Growth Rating Analysts Institutional Peers Historical

DCF Valuation

DCF Valuation Summary

Strong Buy

Fair Value: $625.21 per share(market-calibrated)

+82.4%

Upside to Fair Value

Current

$342.76

Pure Model

$665.06

Fair Value

$625.21

Bull Case

$791.80

Bear Case

$557.30

Market Reality Check

Model Terminal Growth

2.50%

Market-Implied Growth

0.50%

Calibrated Growth

1.80%

Fair value uses 65% model / 35% market-implied terminal growth. Pure model: $665.06.

What's Driving This Ratingfor CB

✓

CapEx already efficient

CapEx at 0.00% of revenue is already at or below sector maintenance level. No normalization needed — cash conversion is already strong.

↑

Margin expansion modeled

Current EBIT margin is 20.03% — below the sector mature average of 38.90%. Model expands margins as the business scales and operating leverage kicks in. Year 10 EBIT reaches $20.3B (26.33% margin).

→

Moderate revenue growth

Analyst consensus projects -0.23% revenue growth, fading to 2.50% by Year 10. Revenue reaches $76.9B (vs $59.6B today).

↔

Perpetuity and exit methods disagree

Perpetuity growth gives $770.03/share (24.4x terminal FCF) while exit multiple gives $560.09/share (14.9x terminal FCF). The base case averages both methods.

🎯

Market pricing in lower growth than model

The market implies only 0.50% perpetual growth — 200bps below the model's 2.50%. This suggests the market sees headwinds or risks not in the model.

✓

Strong cash flow conversion

Year 10 FCF/EBITDA conversion of 80.80% indicates efficient cash generation. FCF reaches $16.6B by Year 10 (21.60% FCF margin).

Weighted Average Cost of Capital (WACC)

Cost of Equity (CAPM)

Risk-Free Rate (Rf)4.50%

Beta (β)0.49

Market Risk Premium4.50%

*Using current implied premium (4.5% per Damodaran 2026), not historical (6.5%)

Cost of Equity (Re)6.70%

Cost of Debt

Pre-tax Cost of Debt5.00%

Tax Rate18.57%

After-tax Cost of Debt4.07%

Equity Weight (E/V)100.00%

Debt Weight (D/V)0.00%

WACC Calculation

WACC = (E/V × Re) + (D/V × Rd × (1-Tc))

WACC = (100.00% × 6.70%) + (0.00% × 4.07%)

= 6.70%

10-Year Free Cash Flow Projections(showing years 1, 3, 5, 7, 10)

Year	Year 1	Year 3	Year 5	Year 7	Year 10
Revenue	$59.4B	$64.6B	$68.0B	$71.4B	$76.9B
EBIT	$11.9B	$12.9B	$15.6B	$17.7B	$20.3B
Tax	$2.2B	$2.4B	$2.9B	$3.3B	$3.8B
NOPAT	$9.7B	$10.5B	$12.7B	$14.4B	$16.5B
+ Depreciation	$240M	$261M	$275M	$289M	$311M
- Capex	--	--	--	--	--
- Δ NWC	-$14M	$175M	$166M	$174M	$188M
Free Cash Flow	$9.9B	$10.6B	$12.8B	$14.5B	$16.6B
Discount Factor	0.937	0.823	0.723	0.635	0.523
Present Value	$9.3B	$8.7B	$9.2B	$9.2B	$8.7B

FCF Formula: Free Cash Flow = NOPAT + Depreciation - Capex - Change in Net Working Capital

Terminal Value Calculation

Perpetuity Growth Method

Year 10 FCF$16.6B

Terminal Growth Rate2.50%

WACC6.70%

TV = FCF₁₀ × (1+g) / (WACC-g)

Terminal Value$406.0B

PV of Terminal Value$212.3B

Exit Multiple Method

Year 10 EBITDA$20.6B

Exit Multiple (EV/EBITDA)12.0x

TV = EBITDA₁₀ × Exit Multiple

Terminal Value$246.8B

PV of Terminal Value$129.1B

Valuation Summary

Perpetuity Growth Method

PV of Projected FCFs$90.5B

PV of Terminal Value$212.3B

Enterprise Value$302.8B

(-) Net Debt-$2.5B

Equity Value$305.3B

Shares Outstanding397M

Price per Share$770.03

Exit Multiple Method

PV of Projected FCFs$90.5B

PV of Terminal Value$129.1B

Enterprise Value$219.6B

(-) Net Debt-$2.5B

Equity Value$222.1B

Shares Outstanding397M

Price per Share$560.09

Pure Model Fair Value

$665.06

Average of perpetuity growth and exit multiple methods (before market calibration)

Sensitivity AnalysisPrice per Share

WACC ↓ / Growth →	1.50%	2.00%	2.50%	3.00%	3.50%
4.70%	$877.15	$957.61	$1,074.72	$1,109.40	$1,066.32
5.70%	$716.88	$757.92	$811.80	$885.67	$993.17
6.70%	$611.42	$635.38	$665.06	$702.77	$752.27
7.70%	$535.07	$550.31	$568.47	$590.51	$617.79
8.70%	$476.32	$486.59	$498.51	$512.53	$529.25

How to read: This table shows how the valuation changes with different WACC (discount rate) and terminal growth rate assumptions. Green = undervalued, Red = overvalued.

Scenario Analysis

Bear Case

$557.30

62.6% vs current

• -25% vs analyst consensus
• Terminal growth: 2.0%
• Beta: 0.61

Base Case

$665.06

94.0% vs current

• Analyst consensus
• Terminal growth: 2.5%
• Beta: 0.49

Bull Case

$791.80

131.0% vs current

• +25% vs analyst consensus
• Terminal growth: 3.0%
• Beta: 0.41

Key Assumptions & Drivers• Financial Services Sector

Growth Assumptions (Select Years)

Year 1 Revenue Growth-0.23%

Year 3 Revenue Growth2.78%

Year 5 Revenue Growth2.50%

Year 7 Revenue Growth2.50%

Year 10 Revenue Growth2.50%

Terminal Growth Rate2.50%

Margin & Efficiency

Current EBIT Margin20.03%

Terminal EBIT Margin38.90%

Tax Rate18.57%

Historical Capex / Rev0.00%

NWC / Revenue10.00%

Key Drivers: Revenue growth, operating margin expansion, capex efficiency, and working capital management are the primary drivers of cash flow generation. Terminal value assumptions significantly impact final valuation.

Institutional-Grade Methodology

Actual Company Data: Revenue, EBIT, Capex, NWC, Tax Rate, Interest Expense, Beta

Market Assumptions: Risk-free: 4.5% (10Y), MRP: 4.5% (Damodaran 2026), Exit: 12x EV/EBITDA (Financial Services sector)

This DCF model is for informational purposes only. Projections are based on assumptions that may not materialize. Past performance does not guarantee future results. Consult a financial advisor before making investment decisions.

Explore More

S&P 500 Screener

Filter and sort all 500 stocks

Market Movers

Today's biggest gainers and losers

Market Heatmap

Visual sector performance