ALL
The Allstate Corporation
$256.45
Banks, Insurers & Asset Managers
85%
P/Tangible Book × ROE Quality
Moderate
·
Conviction
Fair Value
Trading 24.8% below fair value
You pay
$256.45
Bear
$289.85
Fair
$340.80
Bull
$443.04
Bear
$289.85
+13.0%
ROTCE 20.0% → 4.00x TBV
Fair
$340.80
+32.9%
ROTCE 25.0% → 4.00x TBV
Bull
$443.04
+72.8%
ROTCE 30.0% → 4.00x TBV
Key Value Driver
ROTCE (49.5%) vs. cost of equity (6.0%)
Implied Market Multiple
3.18x
Summary
Our base-case estimate uses P/Tangible Book × ROE Quality. We then blend that result with the average analyst price target of $250.50 from 44 analysts, using a 30% weight on analyst consensus. That produces an estimated intrinsic value of $340.80 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 $250.50 (from 44 analysts). Our estimate is 51% 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