AIG
American International Group, Inc.
$81.13
Banks, Insurers & Asset Managers
85%
P/Tangible Book × ROE Quality
Moderate
·
Conviction
Fair Value
Trading 17.6% below fair value
You pay
$81.13
Bear
$52.87
Fair
$98.43
Bull
$125.77
Bear
$52.87
-34.8%
ROTCE 6.5% → 0.79x TBV
Fair
$98.43
+21.3%
ROTCE 8.7% → 1.47x TBV
Bull
$125.77
+55.0%
ROTCE 10.0% → 1.87x TBV
Adjust Assumptions
8.7%
7.2%
Key Value Driver
ROTCE (8.7%) vs. cost of equity (7.2%)
Implied Market Multiple
1.21x
Analyst Consensus (External Reference)
Never blended into the bear/base/bull estimates above.
Average Target (41 analysts)
$86.25
Divergence from AlphaVal
14%
Summary
With ROTCE of 8.7% vs. 7.2% cost of equity, fair P/TBV is 1.47x on $67.14 tangible book, implying $98.43 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.
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