AGO
Assured Guaranty Ltd.
$70.03
Banks, Insurers & Asset Managers
85%
P/Tangible Book × ROE Quality
Strong
·
Conviction
Undervalued
Trading 53.4% below fair value
You pay
$70.03
Bear
$83.86
Fair
$150.44
Bull
$190.38
Bear
$83.86
+19.8%
ROTCE 6.9% → 0.68x TBV
Fair
$150.44
+114.8%
ROTCE 9.2% → 1.22x TBV
Bull
$190.38
+171.9%
ROTCE 10.6% → 1.54x TBV
Adjust Assumptions
9.2%
8.3%
Key Value Driver
ROTCE (9.2%) vs. cost of equity (8.3%)
Implied Market Multiple
0.57x
Analyst Consensus (External Reference)
Never blended into the bear/base/bull estimates above.
Average Target (10 analysts)
$88.00
Divergence from AlphaVal
71%
Summary
With ROTCE of 9.2% vs. 8.3% cost of equity, fair P/TBV is 1.22x on $123.55 tangible book, implying $150.44 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 $88.00 (from 10 analysts). Our estimate is 71% 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