ALL
The Allstate Corporation
$216.60
Banks, Insurers & Asset Managers
85%
P/Tangible Book × ROE Quality
Moderate
·
Conviction
Undervalued
Trading 36.1% below fair value
You pay
$216.60
Bear
$288.28
Fair
$338.96
Bull
$440.65
Bear
$288.28
+33.1%
ROTCE 20.0% → 4.00x TBV
Fair
$338.96
+56.5%
ROTCE 25.0% → 4.00x TBV
Bull
$440.65
+103.4%
ROTCE 30.0% → 4.00x TBV
Key Value Driver
ROTCE (49.5%) vs. cost of equity (6.0%)
Implied Market Multiple
2.68x
Summary
Our base-case estimate uses P/Tangible Book × ROE Quality. We then blend that result with the average analyst price target of $244.38 from 44 analysts, using a 30% weight on analyst consensus. That produces an estimated intrinsic value of $338.96 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.
Dividend-based valuation: $277.07 (27% below our primary estimate). Large gaps suggest the dividend may not fully reflect the company's value.
Wall Street's average price target is $244.38 (from 44 analysts). Our estimate is 55% 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