AMG
Affiliated Managers Group, Inc.
$395.25
Banks, Insurers & Asset Managers
85%
P/Tangible Book × ROE Quality
Mild
·
Conviction
Fair Value
Trading 12.7% below fair value
You pay
$395.25
Bear
$317.04
Fair
$452.92
Bull
$588.80
Bear
$317.04
-19.8%
ROTCE 16.6% → 2.03x TBV
Fair
$452.92
+14.6%
ROTCE 22.1% → 2.92x TBV
Bull
$588.80
+49.0%
ROTCE 25.4% → 3.46x TBV
Adjust Assumptions
22.1%
10.2%
Key Value Driver
ROTCE (22.1%) vs. cost of equity (10.2%)
Implied Market Multiple
3.16x
Analyst Consensus (External Reference)
Never blended into the bear/base/bull estimates above.
Average Target (12 analysts)
$410.00
Divergence from AlphaVal
10%
Summary
With ROTCE of 22.1% vs. 10.2% cost of equity, fair P/TBV is 2.92x on $125.23 tangible book, implying $452.92 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