Ricardo Pillai
3 min read
We came across a bullish thesis on Jackson Financial Inc. (JXN) on Miroslav Štěpánek's Substack. In this article, we will summarize the bulls’ thesis on JXN. Jackson Financial Inc. (JXN)'s share was trading at $82.61 as of 4th June. JXN’s trailing P/E was 62.58 according to Yahoo Finance.
A senior financial advisor shaking hands with a client next to a wall case displaying certificates of successfully completed financial services.
Jackson Financial is the largest provider of variable annuities in the U.S., offering a complex yet sticky retirement product that combines investment with life insurance. These annuities are difficult to exit once entered, creating long-term customer relationships. While the product carries high fees, Jackson’s excellent service and generous advisor incentives have helped maintain its market leadership.
The business is difficult to analyse due to opaque derivative hedging strategies, which cause erratic GAAP earnings. However, the company's adjusted 2024 EPS of $18.79, against a $78 share price, implies a compelling P/E of 4.15. The management’s conservative posture and substantial capital returns bolster the credibility of these adjusted figures. In 2024 alone, Jackson returned $631 million via dividends and buybacks (11.2% yield), and the share count is down 18% over three years. With $700–800 million earmarked for 2025 capital returns and 39% YoY growth in new annuity sales, the firm’s core metrics point to resilience and shareholder alignment.
Though long-term organic growth may remain modest, the margin of safety is provided by ultra-low valuation, strong free cash flow, and optionality around index-linked annuities. A multiple re-rating from today’s depressed levels—even to just 10x earnings—could drive a tripling in market cap. Jackson’s undervaluation stems from its accounting complexity and residual pressure from Prudential’s 2021 spin-off, not fundamental weakness.
Risks from shifting consumer behaviour or market disruption appear long-term and unlikely to threaten near-term returns. For value-oriented investors willing to navigate its opaque financials, Jackson represents a robust, under-the-radar compounding opportunity with potential for 4x returns over five years.
Previously, we covered a bullish thesis on Jackson Financial Inc. (JXN) by Shade Research in November 2024, highlighting the company’s undervaluation, strong fee-based annuity business, and SOTP valuation upside to $142/share. Although the stock has depreciated by approximately 16%, the thesis stands with long-term investors. Miroslav Štěpánek’s thesis reinforces this view, emphasizing Jackson’s sticky product economics, capital return discipline, and normalized earnings power, arguing for a potential 4x return despite GAAP noise.
