AMG
Affiliated Managers Group, Inc.
$301.96
Banks, Insurers & Asset Managers
85%
P/Tangible Book × ROE Quality
Moderate
·
Conviction
Undervalued
Trading 31.8% below fair value
You pay
$301.96
Bear
$309.98
Fair
$442.84
Bull
$575.69
Bear
$309.98
+2.7%
ROTCE 16.6% → 1.91x TBV
Fair
$442.84
+46.7%
ROTCE 22.1% → 2.75x TBV
Bull
$575.69
+90.7%
ROTCE 25.4% → 3.25x TBV
Key Value Driver
ROTCE (22.1%) vs. cost of equity (10.6%)
Implied Market Multiple
2.46x
Summary
Our base-case estimate uses P/Tangible Book × ROE Quality. We then blend that result with the average analyst price target of $402.50 from 12 analysts, using a 20% weight on analyst consensus. That produces an estimated intrinsic value of $442.84 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