AFL
Aflac Incorporated
$114.94
Banks, Insurers & Asset Managers
85%
P/Tangible Book × ROE Quality
Moderate
·
Conviction
Undervalued
Trading 28.5% below fair value
You pay
$114.94
Bear
$112.12
Fair
$160.76
Bull
$160.76
Bear
$112.12
-2.5%
ROTCE 13.4% → 2.79x TBV
Fair
$160.76
+39.9%
ROTCE 17.8% → 4.00x TBV
Bull
$160.76
+39.9%
ROTCE 20.5% → 4.00x TBV
Adjust Assumptions
17.8%
7.4%
Key Value Driver
ROTCE (17.8%) vs. cost of equity (7.4%)
Implied Market Multiple
2.86x
Analyst Consensus (External Reference)
Never blended into the bear/base/bull estimates above.
Average Target (32 analysts)
$119.00
Divergence from AlphaVal
35%
Summary
With ROTCE of 17.8% vs. 7.4% cost of equity, fair P/TBV is 4.00x on $40.19 tangible book, implying $160.76 per share.
Warnings
Traditional cash flow models don't work well for banks — lending activity distorts how much cash the business actually generates.
Common valuation shortcuts don't apply here — for banks, interest payments are a core business cost, not overhead.
Wall Street's average price target is $119.00 (from 32 analysts). Our estimate is 35% above the consensus -- consider that gap carefully.
Key Risks
- Book value quality matters as much as level — check loan loss reserves
- Interest rate sensitivity creates non-linear earnings surprises
- Insurance reserving is actuarial, not financial — errors emerge slowly