AMP
Ameriprise Financial, Inc.
$452.81
Banks, Insurers & Asset Managers
85%
P/Tangible Book × ROE Quality
Moderate
·
Conviction
Undervalued
Trading 33.8% below fair value
You pay
$452.81
Bear
$478.71
Fair
$683.86
Bull
$889.01
Bear
$478.71
+5.7%
ROTCE 20.0% → 2.38x TBV
Fair
$683.86
+51.0%
ROTCE 25.0% → 4.00x TBV
Bull
$889.01
+96.3%
ROTCE 30.0% → 3.87x TBV
Key Value Driver
ROTCE (90.8%) vs. cost of equity (10.7%)
Implied Market Multiple
10.37x
Summary
Our base-case estimate uses P/Tangible Book × ROE Quality. We then blend that result with the average analyst price target of $514.00 from 22 analysts, using a 25% weight on analyst consensus. That produces an estimated intrinsic value of $683.86 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: $185.98 (75% below our primary estimate). Large gaps suggest the dividend may not fully reflect the company's value.
Wall Street's average price target is $514.00 (from 22 analysts). Our estimate is 44% 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