AIG
American International Group, Inc.
$75.33
Banks, Insurers & Asset Managers
85%
P/Tangible Book × ROE Quality
Moderate
·
Conviction
Undervalued
Trading 25.6% below fair value
You pay
$75.33
Bear
$54.36
Fair
$101.21
Bull
$129.32
Bear
$54.36
-27.8%
ROTCE 6.5% → 0.81x TBV
Fair
$101.21
+34.4%
ROTCE 8.7% → 1.51x TBV
Bull
$129.32
+71.7%
ROTCE 10.0% → 1.93x TBV
Adjust Assumptions
8.7%
7.1%
Key Value Driver
ROTCE (8.7%) vs. cost of equity (7.1%)
Implied Market Multiple
1.12x
Analyst Consensus (External Reference)
Never blended into the bear/base/bull estimates above.
Average Target (41 analysts)
$86.88
Divergence from AlphaVal
16%
Summary
With ROTCE of 8.7% vs. 7.1% cost of equity, fair P/TBV is 1.51x on $67.14 tangible book, implying $101.21 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.
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