Is Great West Lifeco (TSX:GWO) Undervalued Following Strong Earnings And A Bigger Buyback?
Great-West Lifeco (TSX:GWO) has attracted fresh attention after reporting higher net income and earnings per share for the second quarter and first half of 2026, alongside an expanded share buyback and affirmed dividends.
See our latest analysis for Great-West Lifeco.
At a share price of CA$92.94, Great-West Lifeco has delivered a 26.36% 90 day share price return and an 85.74% 1 year total shareholder return. This suggests that momentum has strengthened as investors weigh higher earnings, dividends, and the expanded buyback.
If this kind of strength has you thinking about what else might be setting up for future moves, it could be worth scanning a curated list of 3 top founder-led companies
After Great-West Lifeco’s sharp move and richer earnings picture, the stock now sits only slightly below the average analyst target, while some models still flag a steep intrinsic discount. Is the market being cautious or missing something?
Most Popular Narrative: 16.2% Overvalued
Great-West Lifeco is trading at CA$92.94 against a widely followed fair value estimate of CA$80.00, which frames the current debate around how much future growth is already in the price.
Expansion of fee-based, capital-light wealth and asset management businesses (such as Empower) provides more stable, recurring earnings and higher return on equity, leading to more predictable and higher-quality earnings growth.
Significant runway for revenue growth exists from capturing "money in motion" through rollovers/crossovers and increased product penetration among Empower's large participant base, which is likely to boost both asset-based and participant-based fee income.
Curious how a fee heavy Empower platform, modest margin tweaks and a specific future earnings multiple all combine into that CA$80.00 figure? The narrative spells out the revenue glide path, expected profitability mix and share count assumptions that have to line up for that fair value to hold.
Result: Fair Value of CA$80.00 (OVERVALUED)
Have a read of the narrative in full and understand what's behind the forecasts.
However, this depends on Empower delivering smooth integration and cost savings. At the same time, pressure on retirement fees or higher credit losses could quickly challenge the current Great-West Lifeco narrative.
Find out about the key risks to this Great-West Lifeco narrative.
Another View on Great-West Lifeco's Valuation
The earlier fair value narrative says Great-West Lifeco looks 16.2% overvalued at CA$92.94 versus a CA$80.00 target built on earnings forecasts and a 14.7x P/E in 2029. Our DCF model points the other way and flags the stock as trading at a very large discount to its estimated future cash flow value of CA$166.90. That leaves investors asking which set of assumptions feels more realistic.
Look into how the SWS DCF model arrives at its fair value.
Next Steps
Given the mix of optimism and caution around Great-West Lifeco right now, it makes sense to dig into the numbers yourself and decide what feels reasonable. If you are weighing the upside case as part of that process, it is worth taking a closer look at the 4 key rewards.
Looking for more investment ideas beyond Great-West Lifeco?
If Great-West Lifeco has sharpened your interest, do not stop here. A wider watchlist can give you more options when conditions or company stories change.
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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.
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