AFL
Aflac Incorporated
$123.19
Banks, Insurers & Asset Managers
85%
P/Tangible Book × ROE Quality
Mild
·
Conviction
Fair Value
Trading 13.5% below fair value
You pay
$123.19
Bear
$96.52
Fair
$142.43
Bull
$149.05
Bear
$96.52
-21.7%
ROTCE 13.4% → 2.59x TBV
Fair
$142.43
+15.6%
ROTCE 17.8% → 3.82x TBV
Bull
$149.05
+21.0%
ROTCE 20.5% → 4.00x TBV
Key Value Driver
ROTCE (17.8%) vs. cost of equity (7.6%)
Implied Market Multiple
3.07x
Summary
Our base-case estimate uses P/Tangible Book × ROE Quality. We then blend that result with the average analyst price target of $116.33 from 32 analysts, using a 30% weight on analyst consensus. That produces an estimated intrinsic value of $142.43 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 $116.33 (from 32 analysts). Our estimate is 32% 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