American Financial Group, Inc.

AI-generated fair value estimate for this company.

Method: 10-year residual-income (excess-return-on-book) model: starting BVPS $58.14, ROE fading from 19% (yr1) to a 15% terminal level versus a 10% cost of equity, with 40% earnings retention driving ~6-8%/yr BVPS growth; PV of 10 years of residual income ~$33.30/share, plus a terminal residual-income perpetuity at 15% ROE/6% book growth ~$54.09/share, added to starting book value: $58.14+$33.30+$54.09 ~$145.53/share on 82.92M shares outstanding.

Reasoning: AFG is a specialty P&C insurer sustaining a ~20% ROE against a ~90% combined ratio, so intrinsic value is driven by the spread between ROE and cost of equity compounding on book value, not by free cash flow; a residual-income/book-value model captures this cleanly while a naive FCF DCF would be distorted by regulatory capital and investment mark-to-market noise.