Chubb Limited CB
Verdict: Hold. Fair value $340 against a price of $315 on 6 Jan 2026, 8% above the price.
In plain words
The case for: Narrow competitive moat provides durability. Market leadership enables pricing power. Industry tailwinds with growing market.
The case against: Net Income exhibits significant volatility, dropping from $8.53B in 2021 to $5.25B in 2022 before....
Main risks
- Lagging Profitability Growth: Net income 3Y CAGR (2.8%) significantly trails revenue 3Y CAGR (11.3%), indicating margin pressure or volatility. Net margin has compressed from 20.9% in 2021 to 16.5% in 2024.
- Questionable Recent Capital Allocation: The estimated 3-year ROIIC is 10.0%, which is borderline questionable and suggests that capital deployed over the last three years has not generated returns as high as the company's overall ROIC.
- Potential Cash Flow Slowdown: TTM Operating Cash Flow ($13.32B) is notably lower than the most recent full-year 2024 OCF ($16.18B), suggesting a potential deceleration in cash generation in recent quarters.
- Overbought (RSI: 71)
- Market volatility
- Execution risk