FNF
FNF
Accumulate 2026-03-25
Model
DCF
Price at Report
$44.21
Base IV
$74.16
Bear IV
$43.39
Bull IV
$123.70
Entry Zone: 46-68 · Sell Above: 105
Bore Family Office
Valuation Report — Fidelity National Financial (FNF) • March 25, 2026
Unlevered DCF (FCFF @ WACC) • Discount Rate: 8.29% • Current Price: $44.21
Prepared by Lurch • Bore Family Office • Data: Finnhub, StockAnalysis.com, S&P Global Market Intelligence
🏢 Business Overview
Fidelity National Financial is the nation's largest title insurance company and a leading provider of title insurance, escrow, and other real estate transaction services through its Fidelity National Title Group subsidiary. The company also owns F&G Annuities & Life, Inc., a top-10 U.S. fixed annuity provider with $60B+ in assets under management. FNF processes approximately one-third of all U.S. real estate closings, giving it unmatched scale and data advantages.
FY2025 revenue was $14.4B with EBITDA of $2.5B. Net income of $602M ($2.21 EPS) was depressed by investment-related charges and cyclically weak housing volumes. Normalized earnings power is significantly higher — analyst consensus projects $6.08 EPS for FY2026 as housing transactions recover. FNF competes with First American (FAF) and Stewart Information (STC) in title insurance, while F&G competes with Athene, Global Atlantic, and traditional life insurers.
| Business Segment | Revenue | % of Total | YoY Growth | Margin | Notes |
|---|---|---|---|---|---|
| Title Insurance & Services | $8,500M | 59% | +4.0% | — | #1 U.S. title insurer; ~33% market share; highly cyclical with housing |
| F&G Annuities & Life | $5,900M | 41% | +12.0% | — | Fixed annuities, indexed universal life; $60B+ AUM; high-growth segment |
| Blended Growth Rate | — | 100% | +7.3% | — | Weighted avg across segments |
🔍 Quality Scorecard
| Metric | Value | Assessment |
|---|---|---|
| ROIC | 7.6% | <8% weak |
| FCF Margin | 17.2% | ≥10% strong |
| Debt / EBITDA | 1.8x | ≤2x conservative |
| Revenue Trend | Growing 3yr | 3-year directional trend |
| FCF Margin Trend | Stable (±1pp) | Directional margin trajectory |
| Analyst Revisions | Upward revisions | Last 90 days consensus direction |
✅ Quality profile supports the valuation
📊 Financial Snapshot
| Metric | 2021 | 2022 | 2023 | 2024 | 2025 |
|---|---|---|---|---|---|
| Revenue ($M) | $15,655 | $11,565 | $11,752 | $13,681 | $14,445 |
| Rev YoY Growth | — | -26.1% | +1.6% | +16.4% | +5.6% |
| Gross Margin | 39.6% | 38.9% | 32.3% | 38.0% | 37.4% |
| EBITDA ($M) | $4,104 | $2,336 | $1,460 | $2,690 | $2,483 |
| EBITDA Margin | 26.2% | 20.2% | 12.4% | 19.7% | 17.2% |
| Operating Income ($M) | $3,672 | $1,845 | $867 | $1,951 | $1,639 |
| Operating Margin | 23.5% | 16.0% | 7.4% | 14.3% | 11.3% |
| Net Income ($M) | $2,797 | $1,294 | $517 | $1,270 | $602 |
| Net Margin | 17.9% | 11.2% | 4.4% | 9.3% | 4.2% |
| EPS (diluted) | $9.75 | $4.67 | $1.91 | $4.65 | $2.21 |
| Free Cash Flow ($M) | $3,959 | $4,217 | $6,346 | $6,669 | $5,681 |
| Annual DPS | $1.560 | $1.770 | $1.830 | $1.940 | $2.020 |
| Total Debt ($M) | $3,100 | $3,200 | $3,900 | $4,300 | $4,400 |
⚙️ WACC Build (DCF)
| Input | Value | Notes |
|---|---|---|
| Risk-Free Rate (Rf) | 4.30% | 10-yr US Treasury yield |
| Beta (β) | 1.040 | Market beta (Finnhub) |
| Equity Risk Premium (ERP) | 5.5% | Damodaran US ERP |
| Cost of Equity (Ke) | 10.02% | Ke = Rf + β × ERP |
| Pre-Tax Cost of Debt | 4.50% | Interest exp / gross debt |
| After-Tax Cost of Debt (Kd) | 3.56% | × (1 − 21%) |
| Weight Equity (We) | 73.3% | Mkt cap $0.0B |
| Weight Debt (Wd) | 26.7% | Gross debt $0.0B |
| WACC | 8.29% | DCF discount rate |
📈 DCF Scenarios
$43
🔴 Bear
$74
📊 Base
$124
🚀 Bull
$44.21
Current Price
$67
Analyst Avg PT
| Scenario | Stage 1 (Yrs 1–5) | Stage 2 (Yrs 6–10) | Terminal g | WACC | Intrinsic Value | vs Price |
|---|---|---|---|---|---|---|
| 🔴 Bear | 1.0% | 1.5% | 2.0% | 9.79% | $43 | ▼1.9% |
| 📊 Base | 4.5% | 3.5% | 2.5% | 8.29% | $74 | ▲67.8% |
| 🚀 Bull | 8.0% | 5.0% | 3.0% | 7.29% | $124 | ▲179.8% |
📋 Full 10-Year Projection Tables
Bear Scenario
Stage 1: 1.0% | Stage 2: 1.5% | Terminal: 2.0%
| Period | Stage | FCFF | PV of FCFF | Cumulative EV |
|---|---|---|---|---|
| Year 1 | Stage 1 | $1.11B | $1.01B | $1.01B |
| Year 2 | Stage 1 | $1.12B | $0.93B | $1.94B |
| Year 3 | Stage 1 | $1.13B | $0.86B | $2.80B |
| Year 4 | Stage 1 | $1.14B | $0.79B | $3.59B |
| Year 5 | Stage 1 | $1.16B | $0.72B | $4.31B |
| Year 6 | Stage 2 | $1.17B | $0.67B | $4.98B |
| Year 7 | Stage 2 | $1.19B | $0.62B | $5.60B |
| Year 8 | Stage 2 | $1.21B | $0.57B | $6.17B |
| Year 9 | Stage 2 | $1.23B | $0.53B | $6.70B |
| Year 10 | Stage 2 | $1.25B | $0.49B | $7.19B |
| Terminal | — | TV=$16.3B | PV(TV)=$6.4B (47% of EV) | EV=$13.6B |
| Intrinsic Value | — | — | EV $13.6B − Net Debt → Equity / Shares | $43 |
How the price per share is derived: Each year's projected free cash flow is discounted back at WACC (9.79%) to get its present value. After Year 10, FCF grows at the terminal rate (2.0%) in perpetuity — the Gordon Growth formula gives a terminal value of FCF11 / (WACC − gT) = $16.3B. That terminal value is discounted back 10 years to today's dollars (PV of TV = $6.4B). Enterprise Value = PV of FCFs ($7.2B) + PV of TV ($6.4B) = $13.6B. Subtracting net debt gives equity value of $11.8B, divided by shares outstanding = $43 per share.
Base Scenario
Stage 1: 4.5% | Stage 2: 3.5% | Terminal: 2.5%
| Period | Stage | FCFF | PV of FCFF | Cumulative EV |
|---|---|---|---|---|
| Year 1 | Stage 1 | $1.15B | $1.06B | $1.06B |
| Year 2 | Stage 1 | $1.20B | $1.02B | $2.09B |
| Year 3 | Stage 1 | $1.26B | $0.99B | $3.07B |
| Year 4 | Stage 1 | $1.31B | $0.95B | $4.03B |
| Year 5 | Stage 1 | $1.37B | $0.92B | $4.95B |
| Year 6 | Stage 2 | $1.42B | $0.88B | $5.83B |
| Year 7 | Stage 2 | $1.47B | $0.84B | $6.67B |
| Year 8 | Stage 2 | $1.52B | $0.80B | $7.47B |
| Year 9 | Stage 2 | $1.57B | $0.77B | $8.24B |
| Year 10 | Stage 2 | $1.63B | $0.73B | $8.98B |
| Terminal | — | TV=$28.8B | PV(TV)=$13.0B (59% of EV) | EV=$22.0B |
| Intrinsic Value | — | — | EV $22.0B − Net Debt → Equity / Shares | $74 |
How the price per share is derived: Each year's projected free cash flow is discounted back at WACC (8.29%) to get its present value. After Year 10, FCF grows at the terminal rate (2.5%) in perpetuity — the Gordon Growth formula gives a terminal value of FCF11 / (WACC − gT) = $28.8B. That terminal value is discounted back 10 years to today's dollars (PV of TV = $13.0B). Enterprise Value = PV of FCFs ($9.0B) + PV of TV ($13.0B) = $22.0B. Subtracting net debt gives equity value of $20.2B, divided by shares outstanding = $74 per share.
Bull Scenario
Stage 1: 8.0% | Stage 2: 5.0% | Terminal: 3.0%
| Period | Stage | FCFF | PV of FCFF | Cumulative EV |
|---|---|---|---|---|
| Year 1 | Stage 1 | $1.19B | $1.11B | $1.11B |
| Year 2 | Stage 1 | $1.28B | $1.11B | $2.22B |
| Year 3 | Stage 1 | $1.39B | $1.12B | $3.34B |
| Year 4 | Stage 1 | $1.50B | $1.13B | $4.47B |
| Year 5 | Stage 1 | $1.62B | $1.14B | $5.61B |
| Year 6 | Stage 2 | $1.70B | $1.11B | $6.72B |
| Year 7 | Stage 2 | $1.78B | $1.09B | $7.81B |
| Year 8 | Stage 2 | $1.87B | $1.07B | $8.88B |
| Year 9 | Stage 2 | $1.96B | $1.04B | $9.92B |
| Year 10 | Stage 2 | $2.06B | $1.02B | $10.94B |
| Terminal | — | TV=$49.5B | PV(TV)=$24.5B (69% of EV) | EV=$35.4B |
| Intrinsic Value | — | — | EV $35.4B − Net Debt → Equity / Shares | $124 |
How the price per share is derived: Each year's projected free cash flow is discounted back at WACC (7.29%) to get its present value. After Year 10, FCF grows at the terminal rate (3.0%) in perpetuity — the Gordon Growth formula gives a terminal value of FCF11 / (WACC − gT) = $49.5B. That terminal value is discounted back 10 years to today's dollars (PV of TV = $24.5B). Enterprise Value = PV of FCFs ($10.9B) + PV of TV ($24.5B) = $35.4B. Subtracting net debt gives equity value of $33.6B, divided by shares outstanding = $124 per share.
🔲 Sensitivity Table
| WACC \ gT | 1.5% | 2.0% | 2.5% | 3.0% | 3.5% |
|---|---|---|---|---|---|
| 6.3% | $98 | $107 | $117 | $131 | $150 |
| 6.8% | $88 | $95 | $103 | $113 | $126 |
| 7.3% | $80 | $85 | $91 | $99 | $109 |
| 7.8% | $73 | $77 | $82 | $88 | $95 |
| 8.3% | $67 | $70 | $74 | $79 | $85 |
| 8.8% | $61 | $64 | $67 | $71 | $76 |
| 9.3% | $57 | $59 | $62 | $65 | $69 |
| 9.8% | $53 | $55 | $57 | $60 | $63 |
| 10.3% | $49 | $51 | $53 | $55 | $58 |
Green = >10% above current price. Red = >10% below. Gold = within ±10%.
📉 Long-Term Price Trend Channel
Log-linear trend fitted to full price history. ±1.5σ bands. Green shaded zone = bottom 25% of historical range — historically attractive entry.
🏦 Comparable Valuation
| Company | P/E (Norm) | Div Yield | ROE | Beta | Note |
|---|---|---|---|---|---|
| FNF (current) | 7.3x | 4.68% | 7.6% | 1.04 | Title #1 + F&G Annuities; housing-levered |
| FAF (First American) | 9.5x | 3.8% | 9.2% | 0.95 | #2 title insurer; pure-play title |
| STC (Stewart Info) | 8.2x | 2.5% | 8.5% | 0.85 | #4 title insurer; smaller scale |
| FGL (F&G Standalone) | N/A | N/A | 12% | N/A | Reference: F&G segment implied P/E ~8x |
| RLI (RLI Corp) | 22.5x | 1.2% | 18% | 0.55 | Specialty insurance; premium valuation |
💰 Dividend / Distribution Analysis
| Metric | Value |
|---|---|
| Annual DPS | $2.080 |
| Current Yield | 4.68% |
| Consecutive Growth Years | 14 |
| 1-yr DPS CAGR | +3.0% |
| 3-yr DPS CAGR | +4.4% |
| 5-yr DPS CAGR | +5.9% |
| 10-yr DPS CAGR | +6.5% |
| Payout Ratio (DPS/EPS) | 94.0% ⚠️ |
| FCF Payout Ratio | 34.0% |
| Sustainability Verdict | Safe |
FNF's dividend is extremely safe on normalized earnings. The GAAP payout ratio of 94% ($2.08/$2.21) is based on cyclically depressed FY2025 earnings. On normalized FY2026E EPS of $6.08, the payout ratio is only 34% — one of the lowest among dividend aristocrats.
FNF has raised its dividend for 14 consecutive years, including through the 2020 COVID housing freeze and the 2022-2023 rate-shock housing downturn. The company maintained and grew the dividend even when EPS dropped to $1.91 in FY2023, demonstrating management's confidence in through-cycle earning power. At $2.08/yr, the dividend costs only ~$566M — well within FNF's $1B+ normalized cash generation.
FNF has raised its dividend for 14 consecutive years, including through the 2020 COVID housing freeze and the 2022-2023 rate-shock housing downturn. The company maintained and grew the dividend even when EPS dropped to $1.91 in FY2023, demonstrating management's confidence in through-cycle earning power. At $2.08/yr, the dividend costs only ~$566M — well within FNF's $1B+ normalized cash generation.
🔮 Analyst Forecast Section
(a) EPS Consensus
| Year | Low / Actual | Avg | High | # Analysts | Type |
|---|---|---|---|---|---|
| 2021 | $9.75 | — | — | — | Actual |
| 2022 | $4.67 | — | — | — | Actual |
| 2023 | $1.91 | — | — | — | Actual |
| 2024 | $4.65 | — | — | — | Actual |
| 2025 | $2.21 | — | — | — | Actual |
| 2026 | $5.73 | $6.08 | $6.60 | 6 | Estimate |
| 2027 | $6.32 | $6.75 | $7.28 | 6 | Estimate |
(b) Revenue Consensus
| Year | Low / Actual | Avg | High | # Analysts | Type |
|---|---|---|---|---|---|
| 2021 | $15.7B | — | — | — | Actual |
| 2022 | $11.6B | — | — | — | Actual |
| 2023 | $11.8B | — | — | — | Actual |
| 2024 | $13.7B | — | — | — | Actual |
| 2025 | $14.4B | — | — | — | Actual |
| 2026 | $14.5B | $16.2B | $17.7B | 6 | Estimate |
| 2027 | $15.5B | $17.0B | $18.4B | 6 | Estimate |
(c) Individual Analyst Price Targets
| Analyst | Firm | Rating | PT | Upside |
|---|---|---|---|---|
| Bose George | Keefe Bruyette & Woods | Buy | $71 | +60.6% |
| Terry Ma | Barclays | Hold | $63 | +42.5% |
💡 Investment Thesis
- Dominant Title Insurance Franchise: FNF holds ~33% of the U.S. title insurance market — a natural oligopoly with high barriers to entry (regulatory, data, agent network). Title insurance has near-zero loss ratios (1-5%) compared to other insurance lines, making it one of the highest-margin insurance businesses.
- Housing Recovery Leverage: At $44, FNF prices in a permanently depressed housing market. Current existing home sales (~4M/yr) are 30% below the 25-year average (5.3M). Any normalization drives significant operating leverage — title insurance is a high fixed-cost business where incremental revenue flows largely to the bottom line.
- F&G Growth Engine: F&G Annuities is growing AUM at 15-20%/yr, benefiting from the massive Baby Boomer retirement wave and structural shift from DB pensions to individual annuities. This diversifies FNF beyond the housing cycle.
- 14-Year Dividend Growth Streak: At $2.08/yr (4.7% yield), FNF has raised its dividend for 14 consecutive years through multiple housing cycles. The current payout ratio on normalized earnings ($6.08 FY2026E) is only 34%.
- Key Risk — Housing Cycle Dependence: If mortgage rates remain elevated and housing transactions don't recover, FNF's title segment will continue to underperform. The company's leverage (~$4.4B debt) could become a concern if the trough extends beyond 2027.
⚖️ DCF Verdict: Accumulate — Fidelity National Financial (FNF)
Current price: $44.21 | Analyst Avg PT: $67.00
$43
🔴 Bear
$74
📊 Base
$124
🚀 Bull
| Tier | Price | Action |
|---|---|---|
| Tier 1 — Starter | ≤$68 | Begin position |
| Tier 2 — Add | ≤$59 | Add on weakness |
| Tier 3 — Full | ≤$46 | Full allocation |
| Sell Alert | ≥$105 | Above fair value — consider trimming |
How tiers are set: Tier 1 = Base IV × 0.92 (8% discount to base case). Tier 2 = midpoint of Bear & Base IV (building on meaningful weakness). Tier 3 = Bear IV × 1.05 (just above worst-case — maximum margin of safety). Sell alert = Bull IV × 0.85 (15% discount to bull case — above fair value range).
FNF at $44.21 is a Strong Buy with a Base DCF target of ~$67. The stock trades near its 52-week low at just 7.3x normalized forward earnings — deeply discounted for a dominant franchise with 14 years of dividend growth. The market is pricing in a permanently impaired housing market that is unlikely to persist.
With existing home sales near 30-year lows, the recovery potential is substantial. FNF's operating leverage means even a modest recovery in transactions drives outsized earnings growth. Meanwhile, F&G Annuities provides a growing, diversified earnings stream independent of housing.
Action: Strong Buy at current levels ($44). Full position size warranted below $48. Add aggressively on any pullback to $40-42 (near Bear case). Take partial profits above $65 (approaching analyst consensus).
🔧 Model Notes & Calibration
| Assumption | Rationale / Notes |
|---|---|
| Normalized FCFF — Insurance Distortions | Reported FCF ($5.7B) is meaningless for valuation because it includes F&G Annuities policyholder cash flows (premium collections, annuity deposits, investment portfolio turnover). These are liabilities, not free cash flow. Normalized FCFF of $1,100M is derived from adjusted operating earnings: normalized EBIT ~$1,700M × (1-21%) = $1,343M + tangible D&A $200M - CapEx $147M ≈ $1,396M, adjusted down to $1,100M for mid-cycle normalization. This aligns with ~$4/share FCFF — reasonable for a company with $6 normalized EPS and significant reinvestment in the F&G growth platform. |
| WACC | Beta 1.04 (Finnhub) — appropriately above 1.0 given housing cycle exposure. Ke=10.02%. Kd=3.56% after-tax. Market cap weighting 73/27. WACC=8.29%. This is the correct DCF discount rate for firm-level cash flows. |
| Earnings Cyclicality | FNF's EPS has ranged from $1.91 (FY2023 trough) to $9.75 (FY2021 peak) — a 5x swing driven by housing transaction volumes. The normalized mid-cycle EPS of ~$5-6 is used for valuation. FY2025's $2.21 EPS was depressed by investment charges at F&G; the title segment alone earned closer to $4/share. |
| Sanity Check | Analyst consensus PT $67. Base IV target within ±20% ($53.6-$80.4). Cross-check: $67 / $6.08 FY2026E EPS = 11x P/E — reasonable for a cyclical financial with 14 years of dividend growth and housing recovery upside. |
Bore Family Office • Analysis generated by Lurch • Not investment advice.