Is CNA Financial (CNA) Attractive After Recent Weakness And Excess Returns Signal Potential Upside

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If you are wondering whether CNA Financial at around US$44.42 is priced attractively or not, the key question is whether the current share price lines up with its underlying value. The stock has risen about 3.0% over the past week, even though it is down about 7.8% over the past month and about 5.2% year to date, and has delivered a decline of about 2.0% over the past year alongside longer term gains of about 44.2% over three years and 35.7% over five years. These mixed returns suggest investors have been adjusting their expectations and risk appetite over different time frames, with shorter term weakness sitting against stronger multi year performance. Recent coverage has focused on whether insurance stocks still offer value and how their balance sheets and underwriting quality stack up, which frames the debate about what a fair price for CNA Financial might look like. On Simply Wall St's 6 point valuation checklist, CNA Financial scores 5 out of 6. The next sections will unpack what that means using traditional valuation methods, and then finish with a broader way to think about valuation that goes beyond just the headline numbers.

CNA Financial delivered -2.0% returns over the last year. See how this stacks up to the rest of the Insurance industry.

Approach 1: CNA Financial Excess Returns Analysis

The Excess Returns model looks at how much profit a company generates above the return that equity investors are assumed to require. In simple terms, it asks whether CNA Financial is earning more on its equity base than the cost of that equity, and then capitalizes those extra profits into an intrinsic value per share.

For CNA Financial, the model is built around a Book Value of $40.13 per share and a Stable EPS of $3.98 per share, based on the median return on equity from the past 5 years. The Average Return on Equity is 10.48%, while the Cost of Equity is $2.70 per share. That leaves an Excess Return of $1.28 per share on a Stable Book Value of $37.98 per share, again using the median book value from the past 5 years.

Combining these inputs, the Excess Returns model arrives at an estimated intrinsic value of about $73.85 per share. Against a current share price around $44.42, that suggests the stock is trading at a 39.9% discount on this framework.

Result: UNDERVALUED

Our Excess Returns analysis suggests CNA Financial is undervalued by 39.9%. Track this in your watchlist or portfolio, or discover 52 more high quality undervalued stocks.

Story Continues

CNA Discounted Cash Flow as at May 2026

Head to the Valuation section of our Company Report for more details on how we arrive at this Fair Value for CNA Financial.

Approach 2: CNA Financial Price vs Earnings

For profitable companies like CNA Financial, the P/E ratio is a useful yardstick because it links what you pay for the stock to the earnings the business is currently generating. What counts as a "normal" P/E depends on how investors see the company’s growth prospects and risk profile, with higher expected growth or lower perceived risk often justifying a higher multiple.

CNA Financial trades on a P/E of 9.89x. That sits below the Insurance industry average of about 11.26x and below the peer group average of about 15.90x. Simply comparing to peers, the stock looks cheaper, but this does not tell you whether those peers have very different earnings growth, margins or risk.

Simply Wall St’s Fair Ratio aims to fill that gap. It estimates what a reasonable P/E should be for CNA Financial by looking at factors such as earnings growth, industry, profit margins, market cap and risk. For CNA Financial, the Fair Ratio is 12.03x, which is higher than the current 9.89x P/E. On this framework, the stock trades below the multiple implied by its fundamentals.

Result: UNDERVALUEDNYSE:CNA P/E Ratio as at May 2026

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Upgrade Your Decision Making: Choose your CNA Financial Narrative

Earlier it was mentioned that there is an even better way to think about valuation. Meet Narratives, a simple way for you to attach a clear story about CNA Financial to the numbers behind your own fair value, revenue, earnings and margin expectations, then link that story to a financial forecast and a fair value that can be compared with the current share price to help you decide when you might buy or sell.

On Simply Wall St’s Community page, millions of investors use Narratives as an accessible tool that updates when fresh information like news or earnings arrives, so your view stays current rather than fixed at one point in time.

For CNA Financial, one investor might build a Narrative close to the most bullish analyst view, with a fair value around the US$53.00 target, while another might lean toward the most cautious view, closer to US$43.00. The platform shows you how each story flows through to a forecast and a fair value, so you can decide which Narrative best fits your own expectations.

Do you think there's more to the story for CNA Financial? Head over to our Community to see what others are saying!NYSE:CNA 1-Year Stock Price Chart

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 CNA.

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