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Fairfax Financial Holdings (TSE:FFH)
TSX:FFH
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Fairfax Financial Holdings (FFH) AI Stock Analysis

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TSE:FFH

Fairfax Financial Holdings

(TSX:FFH)

Rating:76Outperform
Price Target:
C$2,655.00
▲(11.70% Upside)
Fairfax Financial Holdings' strong financial performance and positive earnings call sentiment are the primary drivers of the stock score. The company's valuation suggests it is undervalued, adding to its attractiveness. However, technical indicators point to potential short-term bearish momentum, which slightly offsets the overall positive outlook.
Positive Factors
Financial Performance
Increased target multiple reflecting continued good operating income visibility and continued solid BVPS growth.
Underwriting Income
Better underwriting income with a 98.5% combined ratio versus the 100.5% estimate.
Negative Factors
Division Performance
Other division lower than expected, largely on one-time non-cash impairment charges.
Earnings from Associates
Earnings from associates are weaker than expected, which can be unpredictable.

Fairfax Financial Holdings (FFH) vs. iShares MSCI Canada ETF (EWC)

Fairfax Financial Holdings Business Overview & Revenue Model

Company DescriptionFairfax Financial Holdings Limited, through its subsidiaries, provides property and casualty insurance and reinsurance, and investment management services in the United States, Canada, Asia, and internationally. The company operates through Insurance and Reinsurance, Run-off, and Non-Insurance Companies segments. It insures against losses to property from fire, explosion, earthquake, windstorm, flood, boiler explosion, machinery breakdown, and construction defects, as well as underwrites automobile, commercial and personal property, and crop insurance. The company also offers workers' compensation, employer's liability, accident and health, medical malpractice, professional liability, and umbrella coverage insurance products; marine, aerospace, surety risk, and other risks and liabilities insurance products; and reinsurance products. In addition, it retails home improvement goods, toys and baby products, golf equipment, sports apparel and accessories, housewares and home décors, and tableware and gifts; invests in retail business; and owns and operates holiday resorts. Further, the company provides integrated travel and travel-related financial services; originates, processes, and distributes pulses and staple foods; creates, produces, and distributes entertainment content; and provision of pet medical insurance and database services, as well as media and marketing solutions. The company was formerly known as Markel Financial Holdings Limited and changed its name to Fairfax Financial Holdings Limited in 1987. Fairfax Financial Holdings Limited was incorporated in 1951 and is headquartered in Toronto, Canada.
How the Company Makes MoneyFairfax Financial generates revenue primarily through its insurance and reinsurance operations, where it earns premiums from policyholders in exchange for coverage against various risks. The company invests the premiums it collects into a diversified investment portfolio, which includes equities, fixed income, and alternative investments, generating investment income. Additionally, Fairfax benefits from underwriting profits, which occur when the premiums received exceed the claims paid out and operating expenses. Significant partnerships with other insurers and reinsurers enhance its market reach and capacity for risk acceptance, further contributing to its earnings. The company's strategic focus on long-term value creation through disciplined underwriting and proactive investment management also plays a crucial role in its profitability.

Fairfax Financial Holdings Earnings Call Summary

Earnings Call Date:Jul 31, 2025
(Q2-2025)
|
% Change Since: |
Next Earnings Date:Oct 30, 2025
Earnings Call Sentiment Positive
The earnings call presented strong financial performance with robust net earnings growth, increased book value per share, and significant investment gains. However, there were notable challenges in specific segments, particularly in associate profits and some North American insurance operations.
Q2-2025 Updates
Positive Updates
Strong Net Earnings Growth
Net earnings increased to $1.4 billion in Q2 2025, up from $915 million in Q2 2024. Net earnings for the first half of 2025 totaled $2.4 billion.
Book Value Per Share Increase
Book value per share rose to $1,158 in Q2 2025, marking a 10.8% increase in the first half of the year, adjusted for a $15 dividend.
Robust Investment Gains
Net gains on investments were $952 million in the quarter, driven by equity exposures and bond portfolio gains.
Positive Underwriting Results
The combined ratio was 93.3%, producing an underwriting profit of $427 million. Most insurance and reinsurance operations posted profits.
International Growth
International insurance and reinsurance operations saw a 4.2% increase in gross premiums, with standout growth in Europe and Asia.
Rating Upgrades
Standard & Poor's upgraded the financial strength ratings of core operating companies to AA- and debt rating to A-; AM Best upgraded Allied World's rating to A+.
Negative Updates
Decline in Profits of Associates
Profits of associates decreased to $131 million, down from $221 million the previous year, driven by losses on the Waterous fund.
Challenges in North American Insurance Segment
The North American Insurance segment saw a 1% decrease in gross premiums, with Northbridge's gross premium down 2.9% in Canadian dollar terms.
Underperformance at Zenith
Zenith's combined ratio was 103.3%, representing an underwriting loss of $6 million due to multiple years of rate decreases in the workers' compensation space.
Gulf Insurance Challenges
Gulf Insurance had a combined ratio of 97.9%, negatively affected by elevated loss ratios on its health business and the loss of a major insurance contract.
Company Guidance
In the 2025 second quarter, Fairfax reported net earnings of $1.4 billion, up from $915 million in the second quarter of 2024, resulting in net earnings of $2.4 billion for the first half of 2025. Operating income from insurance and reinsurance, before risk margin, was $1.1 billion, with underwriting income at $427 million. Interest and dividend income increased to $666 million, while net gains on investments were $952 million. The book value per share rose to $1,158, marking a 10.8% increase for the first half, adjusted for a $15 dividend. Gross premiums written totaled $9.1 billion, up 2.6% year-over-year. The combined ratio was 93.3%, with underwriting profit at $427 million. Reserve development contributed $163 million. Fairfax maintained a strong financial position with $3 billion in cash and investments at the holding company level and a total debt to total capital ratio of 25.9%.

Fairfax Financial Holdings Financial Statement Overview

Summary
Fairfax Financial Holdings demonstrates strong profitability with a consistent gross profit margin and improving net profit margin. The company shows a solid financial foundation with a moderate debt-to-equity ratio and strong return on equity. Cash flow generation is robust, although there is room for improvement in converting operating income to cash.
Income Statement
85
Very Positive
Fairfax Financial Holdings shows strong profitability with a consistent gross profit margin above 80% and a net profit margin improving to 14.61% in TTM. Revenue growth is positive at 4.06% in TTM, indicating a recovery from previous declines. EBIT and EBITDA margins are healthy, reflecting efficient operations.
Balance Sheet
78
Positive
The company maintains a moderate debt-to-equity ratio of 0.51 in TTM, indicating balanced leverage. Return on equity is strong at 18.64%, showcasing effective use of equity to generate profits. The equity ratio is stable, suggesting a solid financial foundation.
Cash Flow
70
Positive
Free cash flow growth is robust at 26.61% in TTM, indicating improved cash generation. However, the operating cash flow to net income ratio is low, suggesting potential challenges in converting income to cash. The free cash flow to net income ratio is strong at 0.88, reflecting good cash profitability.
BreakdownTTMDec 2024Dec 2023Dec 2022Dec 2021Dec 2020
Income Statement
Total Revenue31.25B28.45B31.83B25.82B25.80B19.79B
Gross Profit25.26B28.45B25.80B25.82B25.80B19.79B
EBITDA7.93B7.04B6.09B2.03B-100.50M1.47B
Net Income4.57B3.87B4.38B1.15B3.40B37.40M
Balance Sheet
Total Assets103.57B96.78B91.99B92.13B86.65B74.05B
Cash, Cash Equivalents and Short-Term Investments10.04B7.28B7.96B11.70B25.34B16.30B
Total Debt13.22B13.06B10.80B9.32B7.75B8.81B
Total Liabilities73.57B68.43B64.28B71.79B65.33B56.53B
Stockholders Equity25.77B24.07B22.95B16.68B16.39B13.86B
Cash Flow
Free Cash Flow3.36B3.59B-553.50M-4.84B6.29B-133.50M
Operating Cash Flow3.79B3.99B-39.40M-4.42B6.64B139.80M
Investing Cash Flow-1.26B-1.32B92.00M384.80M1.84B-46.80M
Financing Cash Flow-1.65B-1.56B-1.07B-1.29B-1.19B436.90M

Fairfax Financial Holdings Technical Analysis

Technical Analysis Sentiment
Positive
Last Price2377.00
Price Trends
50DMA
2421.12
Negative
100DMA
2319.53
Positive
200DMA
2154.95
Positive
Market Momentum
MACD
-11.20
Positive
RSI
47.54
Neutral
STOCH
33.02
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For TSE:FFH, the sentiment is Positive. The current price of 2377 is below the 20-day moving average (MA) of 2378.36, below the 50-day MA of 2421.12, and above the 200-day MA of 2154.95, indicating a neutral trend. The MACD of -11.20 indicates Positive momentum. The RSI at 47.54 is Neutral, neither overbought nor oversold. The STOCH value of 33.02 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for TSE:FFH.

Fairfax Financial Holdings Peers Comparison

Overall Rating
UnderperformOutperform
Sector (68)
Financial Indicators
Name
Overall Rating
Market Cap
P/E Ratio
ROE
Dividend Yield
Revenue Growth
EPS Growth
76
Outperform
$57.16B8.1018.70%0.91%16.79%20.82%
68
Neutral
$17.95B11.5410.27%3.74%9.64%1.17%
$32.81B14.4213.38%4.19%
77
Outperform
C$49.05B21.0813.23%1.84%5.25%15.06%
76
Outperform
C$50.29B13.5814.19%4.39%15.27%4.72%
75
Outperform
C$13.68B13.6813.43%2.47%-4.55%42.41%
62
Neutral
C$8.63B20.9411.48%0.98%18.98%0.82%
* Financial Sector Average
Performance Comparison
Ticker
Company Name
Price
Change
% Change
TSE:FFH
Fairfax Financial Holdings
2,377.00
761.45
47.13%
SLF
Sun Life Financial
57.68
5.09
9.68%
TSE:GWO
Great-West Lifeco
54.34
11.79
27.71%
TSE:IAG
iA Financial Corporation Inc
149.31
48.00
47.38%
TSE:IFC
Intact Financial Corporation
275.03
28.02
11.34%
TSE:DFY
Definity Financial Corp.
71.63
22.35
45.35%

Fairfax Financial Holdings Corporate Events

Private Placements and FinancingBusiness Operations and Strategy
Fairfax Financial Launches C$700 Million Senior Notes Offering
Positive
Aug 12, 2025

Fairfax Financial Holdings Limited has announced a C$700 million senior notes offering, consisting of C$400 million due in 2035 and C$300 million due in 2055. The proceeds from this offering will be used to refinance existing debt, pursue potential acquisitions, and for general corporate purposes, which may include increasing cash reserves or short-term investments. This strategic move is expected to enhance Fairfax’s financial flexibility and support its growth initiatives.

The most recent analyst rating on (TSE:FFH) stock is a Buy with a C$2200.00 price target. To see the full list of analyst forecasts on Fairfax Financial Holdings stock, see the TSE:FFH Stock Forecast page.

Business Operations and StrategyFinancial Disclosures
Fairfax Financial Holdings Reports Strong Q2 2025 Earnings Boosted by Investment Gains
Positive
Jul 31, 2025

Fairfax Financial Holdings reported net earnings of $1,436.7 million in Q2 2025, a significant increase from $915.4 million in the same quarter of 2024, driven by substantial net gains on investments. The company’s property and casualty insurance operations showed robust performance with a combined ratio of 93.3% and an underwriting profit of $426.9 million, indicating strong market positioning and effective risk management.

The most recent analyst rating on (TSE:FFH) stock is a Buy with a C$1850.00 price target. To see the full list of analyst forecasts on Fairfax Financial Holdings stock, see the TSE:FFH Stock Forecast page.

Other
Fairfax Warns Against Fraudulent Online Communications
Neutral
Jul 18, 2025

Fairfax Financial Holdings Limited has issued a reminder to its shareholders and the public that neither the company, its CEO Prem Watsa, nor any of its officers provide financial or investment advice through social media or messaging platforms. The company warns against impersonation scams and advises individuals to seek information through official channels such as their website, press releases, and reports.

The most recent analyst rating on (TSE:FFH) stock is a Buy with a C$2600.00 price target. To see the full list of analyst forecasts on Fairfax Financial Holdings stock, see the TSE:FFH Stock Forecast page.

Executive/Board ChangesBusiness Operations and Strategy
Fairfax Financial Appoints Amitabh Kant as Senior Advisor to Boost Indian Investments
Positive
Jun 26, 2025

Fairfax Financial Holdings has appointed Mr. Amitabh Kant as a Senior Advisor, leveraging his extensive experience in economic development and transformative initiatives in India. This strategic move is expected to enhance Fairfax’s investment approach in India, aligning with the country’s ambitious economic goals and benefiting stakeholders by supporting sectors critical to India’s growth, such as infrastructure and financial services.

The most recent analyst rating on (TSE:FFH) stock is a Buy with a C$1850.00 price target. To see the full list of analyst forecasts on Fairfax Financial Holdings stock, see the TSE:FFH Stock Forecast page.

Private Placements and FinancingBusiness Operations and Strategy
Fairfax Financial Holdings Prices $900 Million Senior Notes Offering
Positive
May 16, 2025

Fairfax Financial Holdings Limited announced the pricing of a private offering of senior notes totaling US$900 million, with the proceeds intended for refinancing, repaying, or redeeming existing obligations, as well as potential acquisitions or investments. This strategic move aims to strengthen Fairfax’s financial position and flexibility, potentially impacting its market operations and providing opportunities for growth and investment.

The most recent analyst rating on (TSE:FFH) stock is a Buy with a C$1850.00 price target. To see the full list of analyst forecasts on Fairfax Financial Holdings stock, see the TSE:FFH Stock Forecast page.

Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.

Disclaimer

This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.Date of analysis: Aug 28, 2025