ALL
The Allstate Corporation
$235.78
Banks, Insurers & Asset Managers
85%
P/Tangible Book × ROE Quality
Moderate
·
Conviction
Undervalued
Trading 26.9% below fair value
Bear
$322.76
+36.9%
ROTCE 20.0% → 4.00x TBV
Fair
$322.76
+36.9%
ROTCE 25.0% → 4.00x TBV
Bull
$322.76
+36.9%
ROTCE 30.0% → 4.00x TBV
Adjust Assumptions
49.5%
6.0%
Key Value Driver
ROTCE (49.5%) vs. cost of equity (6.0%)
Implied Market Multiple
2.92x
Analyst Consensus (External Reference)
Never blended into the bear/base/bull estimates above.
Average Target (45 analysts)
$266.43
Divergence from AlphaVal
21%
Summary
With ROTCE of 49.5% vs. 6.0% cost of equity, fair P/TBV is 4.00x on $80.69 tangible book, implying $322.76 per share. DDM cross-check: $358.91.
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