Clal Insurance Enterprises Holdings (TASE:CLIS) is back on investors' radar after its recent share price move, with the stock up 4.2% on the day and 3.5% over the past week.
See our latest analysis for Clal Insurance Enterprises Holdings.
That 4.2% 1 day share price return and 3.5% 7 day share price return sit against a much stronger backdrop, with a 32.9% 90 day share price return and a 1 year total shareholder return above 100%, which suggests momentum is still building rather than fading.
If Clal Insurance Enterprises Holdings has caught your attention, it can be helpful to see how other financial names stack up too. You can broaden your search with stable growth stocks screener (None results) .
With a 1 year total return above 100% and recent gains still rolling in, the key question now is whether Clal Insurance Enterprises Holdings is trading below its intrinsic value or if the market is already pricing in future growth.
Price-to-Earnings of 18.8x: Is it justified?
On a P/E of 18.8x at a last close of ₪215.3, Clal Insurance Enterprises Holdings currently trades at a richer earnings multiple than both its peers and the wider Asian insurance sector.
The P/E ratio compares the share price to earnings per share and is a common shortcut for how much investors are willing to pay for each unit of current earnings. For an insurance and financial services group like Clal, this matters because earnings quality, consistency and growth expectations often drive how far that multiple can stretch.
According to the data provided, Clal is described as expensive on this basis compared with a peer average P/E of 16.7x. That gap suggests the market is attaching a premium to its earnings, even though its Return on Equity is 9.1%, described as low, and recent net profit margins, at 3.3%, sit below last year. Investors who focus heavily on relative valuation may see this as the market pricing in more optimistic expectations than peers, rather than a discount.
Against the broader Asian insurance industry, the contrast is even stronger, with the sector on an average P/E of 11.5x and Clal again flagged as expensive relative to that benchmark. That implies investors are paying a materially higher multiple for Clal's earnings than for the typical insurer in the region.
See what the numbers say about this price — find out in our valuation breakdown.
Result: Price-to-Earnings of 18.8x (OVERVALUED)
However, those premium P/E and over 100% 1 year total return also raise the risk that any disappointment on earnings quality or margins could trigger a sharp reset.
Find out about the key risks to this Clal Insurance Enterprises Holdings narrative.
Another View: Our DCF Model
While the current P/E of 18.8x presents Clal Insurance Enterprises Holdings as expensive compared with peers, our DCF model goes even further. It estimates a fair value of ₪69.54 compared with the recent price of ₪215.3, which suggests the shares are overvalued based on this method as well.
Look into how the SWS DCF model arrives at its fair value.
Simply Wall St performs a discounted cash flow (DCF) on every stock in the world every day ( check out Clal Insurance Enterprises Holdings for example ). We show the entire calculation in full. You can track the result in your watchlist or portfolio and be alerted when this changes, or use our stock screener to discover 884 undervalued stocks based on their cash flows . If you save a screener we even alert you when new companies match - so you never miss a potential opportunity.
Build Your Own Clal Insurance Enterprises Holdings Narrative
If you look at the numbers and reach a different conclusion, or simply prefer to test the assumptions yourself, you can build a personalised view in just a few minutes with Do it your way .
A great starting point for your Clal Insurance Enterprises Holdings research is our analysis highlighting 1 important warning sign that could impact your investment decision.
Looking for more investment ideas?
If you are excited by what you have seen so far, do not stop at one company. Broaden your watchlist with a few focused stock ideas.
-
Target potential mispriced opportunities by checking out these 884 undervalued stocks based on cash flows that currently screen as cheap based on their cash flows.
-
Ride the momentum in artificial intelligence by scanning these 25 AI penny stocks that are directly exposed to this theme.
-
Add income ideas to your shortlist by reviewing 3%","yLinkElement":"context_link","yModuleName":"content-canvas","yTrafficOrigin":"content-canvas default"}" rel="noopener noreferrer nofollow">these 12 dividend stocks with yields > 3% that currently offer yields above 3%.
This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
Companies discussed in this article include CLIS.TA .
Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com
