$41.73
$109.50
bear $41.73
base $77.91
bull $109.50
margin of safety $44.00
market price* $40.05
Fidelity National Financial owns two quite different businesses. The larger and more durable one is title insurance. Its underwriters (Fidelity National Title, Chicago Title, Commonwealth Land Title, Alamo Title and National Title of New York) and its escrow offices insure that a buyer or lender gets clean title when US property changes hands, and they charge fees for running the closing. Most mortgage lenders will not close without a title policy. The four largest title groups write about 80% of US premiums, and FNF is the largest. Texas supplies about 14% of title premiums and California about 12%. The second business is a stake of about 72% in F&G Annuities & Life, a publicly traded annuity and life insurer with a retained portfolio of about $56 billion. The company has handed part of F&G to its own shareholders twice: about 15% in December 2022 and about 12% on December 31, 2025. How we measured earnings. F&G's annuity deposits and reinsurance flows run through reported operating cash flow. In 2025 that cash flow was $5.8 billion against $602 million of net earnings, so it says little about what owners earn. We started from net earnings instead. We removed investment gains and losses in the title and holding-company portfolios, added back title and corporate depreciation and amortization, deducted the spending needed to maintain those assets, and treated stock compensation as a cost. F&G counts at the company's share of its reported earnings, with F&G's amortization of policy acquisition costs treated as a real cost. For 2025 we added back a $471 million one-time deferred tax charge tied to the December 2025 F&G distribution. On this basis owner earnings were $2.92 a share in 2018, $10.98 in the 2021 refinancing boom, $6.15 in 2022, $2.21 in the 2023 trough, $4.78 in 2024 and $4.31 in 2025. We value the title and holding-company business before the $73 million a year of cash interest on the parent's own bonds, then subtract what the parent owes. F&G is an insurer that borrows as part of running its business, so its earnings are counted after its own interest and its debt is not subtracted again. Our previous estimates were built on a different basis and are not comparable. Starting point. Title earnings run at their 2018-2025 median of about $986 million after tax, excluding investment gains and losses. That window covers a full housing cycle: the 2020-2021 boom, the 2022-2023 bust and the partial recovery. We add about $40 million by which depreciation exceeds maintenance spending, subtract about $100 million of holding-company costs (in line with 2025 and slightly above 2026's pace), and add back the $73 million of bond interest. That gives about $3.73 a share on 268 million diluted shares. Part of the holding company's reported income is F&G's dividend to the parent, about $28 million a quarter, which is removed in consolidation so it is not counted twice. F&G's reported earnings swing widely because hedging marks run through them: $635 million, a $58 million loss, $642 million and $271 million over 2022-2025. We use $450 million, the median. The company's 72% share adds about $1.21 a share, for a total starting level of about $4.94 a share. Near term. On this before-interest basis, 2025 earnings fell about 9%, from $5.05 to $4.57 a share, mostly because of a $167 million charge at F&G. The base case has year one at about $5.01, roughly 10% above 2025. The reason is in the June 2026 quarterly report: first-half title pre-tax earnings were $662 million against $538 million a year earlier, direct premiums rose 18% and agency premiums 15%, second-quarter commercial revenue reached $440 million (up 32%), and F&G's earnings attributable to the company were $120 million against $15 million. Base case, $77.91 a share. Title and holding-company earnings grow 2% a year for ten years, then stay flat with no further growth credited. Title premiums are set as a percentage of the property's price, and the company's title earnings compounded at about 3% a year from 2016 to 2025. We credit less than that because part of that record came from rising home prices and transaction volumes, which we do not assume will continue. After year ten the business keeps earning: lenders' requirement for title insurance and the concentrated industry sustain it, and FNF's underwriters have operated through every housing cycle for well over a century. About $42 a share of the value comes from title earnings after year ten, so this estimate rests mainly on the title business lasting. F&G's share stays flat for ten years and then fades to zero over years 11 to 20, because F&G keeps its earnings to grow its annuity book and we give no credit for growth beyond replacing the book as it runs off. Title is worth about $72.64 a share and the F&G stake about $11.37, so the business is worth about $84.01. Net debt is $6.10, leaving $77.91. Debt. The parent has $2.15 billion of bonds: 4.50% due August 2028 ($450 million), 3.40% due June 2030 ($650 million), 2.45% due March 2031 ($600 million) and 3.20% due September 2051 ($450 million). These fixed coupons are cheap; the saving until each bond matures is worth about $308 million, so we count the bonds at about $1.84 billion. The parent held $457 million of cash and short-term investments at June 30, 2026. We keep $250 million as a working buffer and treat the rest as surplus. That leaves net debt of $6.10 a share. F&G's own debt of about $2.2 billion is part of its insurance business and is already reflected in its earnings. Bear case, $41.73 a share. Title earnings depend on housing and mortgage credit, and this case puts one downturn like 2007-2010 into years two through six, with the depth taken from the company's own record. Net earnings fell from $438 million in 2006 to $130 million in 2007 and to a $179 million loss in 2008, which included a $262 million charge to strengthen claim reserves for policies written in the boom, before recovering to $222 million in 2009. Industry title revenue fell from $17.8 billion in 2005 to $11.3 billion in 2008. Applied to today's starting level, title and holding-company earnings run at $3.73 a share in year one, $1.12 in year two, a loss of $1.49 in year three, $1.86 in year four, $2.61 in year five, $2.98 in year six, and $3.35 a year from year seven onward with no growth. F&G takes a credit cycle sized from the life industry's 2008-2009 record, when US life insurers booked about $79 billion of realized investment losses, roughly 2.5% of their assets. Applied to F&G's $56 billion retained portfolio, that costs the company's stake about $2.97 a share after tax over years three and four, either as capital the parent must put in or as value lost to raising capital at a bad time. F&G earns nothing in those years, then contributes its 2025 level of $0.71 a share, running off to zero by year 15. The 2028 and 2030 bonds mature inside the downturn; we assume they are refinanced at 8% for ten years, which adds about $136 million to what is owed, and we give no credit for the parent's surplus cash. The business is worth about $49.11 a share ($48.21 from title and $0.90 from F&G) against net debt of $7.38, leaving $41.73. The business can carry its debt through this case: the parent's cash covers several years of the roughly $80 million of annual interest through the one loss year, and in 2008 the company not only survived but acquired LandAmerica's two main title underwriters. The bear value is well above tangible book, which is about $6.76 a share because most of the company's equity is acquisition goodwill. The title business earns its profit on transaction fees rather than on capital at risk, and its $1.7 billion of claim reserves are already funded. A downturn cuts its earnings but has not historically destroyed the franchise. Bull case, $109.50 a share. Title starts from its 2026 pace of about $4.12 a share rather than the cycle median, supported by rising commercial revenue and a fee per file up 5% to $4,107 in the second quarter of 2026. Title then grows 3% a year for ten years, its demonstrated 2016-2025 rate, then 2% for another ten years, then holds flat. F&G's share holds at $1.21 a share indefinitely. The business is worth about $115.60 a share ($95.45 from title and $20.15 from F&G), net debt is $6.10, and that leaves $109.50. What could make this wrong: a housing collapse with home prices falling, as in 2008, rather than only volumes falling, as in 2023, since title premiums are tied to price and claims rise with fraud and default; credit losses at F&G worse than the industry average, since its portfolio leans more toward private credit, structured securities and alternative investments than the average 2008-era life insurer; or rate cuts by regulators in California or Texas, which the company names as a risk. The latest annual report discloses no pending title rate reduction and no federal program to replace title insurance. The parent also carries a deferred tax liability tied to its F&G stake; it becomes payable only if the stake is disposed of in a taxable transaction, so we have not subtracted it. How we set the margin-of-safety price. We are reasonably sure of the title earnings level, because it is the median of a full cycle and 2026 is running above it. We are less sure of F&G, whose reported earnings have ranged from a loss to $642 million in four years. The worst plausible outcome is a 2008-style housing bust arriving together with a credit cycle that forces F&G to raise capital. The structure would survive it: the parent's debt is long-dated and cheap, no single customer matters, and the 2008 record shows the title franchise comes through. The 2028 and 2030 maturities could come due at a bad time but are small relative to title earnings in a normal year. If we are wrong about the two things most likely to be wrong, F&G's stake being worth nothing (about $11 a share) and title earnings never growing (about $10 a share), the shares would be worth about $57. Shareholders are paid $2.08 a year in dividends, covered by title earnings alone in a normal year, which adds about $6 over an assumed three-year holding period. In the bear case, after a 2008-style downturn, the shares would still be worth about the margin-of-safety price; on a recovery to the value supported by a normal title business, the margin-of-safety price of $44 implies the 20% target over three years.