Fairfax Earnings: Solid Finish to Strong Year

Like its peers, Fairfax is enjoying multiple tailwinds at the moment that are driving strong performance. For the full year, book value per share, adjusted for dividends, grew 14.5%. We will maintain our CAD 1,290 fair value estimate for the no-moat company and see shares as materially overvalued. We think the market is overly focused on the positive near-term picture for Fairfax and its P&C insurance peers and not fully factoring in the fact that returns will ultimately normalize. We think this is especially true for Fairfax, given that it has had some additional positives recently.