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Assessing MS&AD Insurance Group Holdings (TSE:8725) Valuation After Recent Share Price Strength

Simply Wall St · 4d ago

MS&AD Insurance Group Holdings (TSE:8725) has been drawing attention after a recent share price move, with the stock higher over the past month and over the past 3 months, prompting fresh interest in its valuation.

See our latest analysis for MS&AD Insurance Group Holdings.

That short term share price strength, including a 9.03% 30 day share price return and 14.02% 90 day share price return to ¥3,838, sits alongside a 17.66% 1 year total shareholder return and very large 5 year total shareholder return. This suggests momentum has been building recently while longer term holders have already seen substantial gains.

If this kind of move in a financial name has your attention, it could be a good moment to widen your search and check out fast growing stocks with high insider ownership.

With MS&AD trading at ¥3,838, sitting below a ¥4,137 analyst target and an indicated intrinsic discount of about 60%, the big question is whether this insurer is still undervalued or whether the market is already pricing in future growth.

Price-to-Earnings of 7.9x: Is it justified?

On a P/E of 7.9x at a last close of ¥3,838, MS&AD screens as good value compared with both peers and the broader Asian insurance sector.

The P/E ratio tells you how much investors are paying today for each unit of current earnings, which matters a lot for an established insurer with sizeable profits. For MS&AD, a lower P/E can suggest the market is assigning a relatively cautious price tag to those earnings, despite the group having high quality earnings according to the available assessment.

Here, the gap is clear. MS&AD trades at 7.9x earnings, while the Asian insurance industry average sits at 11.5x and the peer average at 12.9x, a much richer level. Against an estimated fair P/E of 13x, the current multiple is even further behind, indicating a notable difference between the current valuation and that fair ratio benchmark.

Explore the SWS fair ratio for MS&AD Insurance Group Holdings

Result: Price-to-Earnings of 7.9x (UNDERVALUED)

However, you should weigh that low P/E against risks such as the 3.5% annual net income decline and any shift in global insurance demand or claims trends.

Find out about the key risks to this MS&AD Insurance Group Holdings narrative.

Another view: DCF paints a different picture

While the 7.9x P/E suggests MS&AD looks inexpensive against peers, our DCF model indicates an estimated fair value of ¥9,564.94 compared with the current ¥3,838. That difference points to a much deeper potential undervaluation. Which signal do you trust more?

Look into how the SWS DCF model arrives at its fair value.

8725 Discounted Cash Flow as at Jan 2026
8725 Discounted Cash Flow as at Jan 2026

Simply Wall St performs a discounted cash flow (DCF) on every stock in the world every day (check out MS&AD Insurance Group 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 882 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 MS&AD Insurance Group Holdings Narrative

If you look at these numbers and reach a different conclusion, or simply prefer to shape the story yourself, you can build a full view in just a few minutes, Do it your way.

A great starting point for your MS&AD Insurance Group Holdings research is our analysis highlighting 3 key rewards and 1 important warning sign that could impact your investment decision.

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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.