AMP
Ameriprise Financial, Inc.
$498.34
Banks, Insurers & Asset Managers
85%
P/Tangible Book × ROE Quality
Moderate
·
Conviction
Undervalued
Trading 30.8% below fair value
You pay
$498.34
Bear
$504.14
Fair
$720.20
Bull
$936.26
Bear
$504.14
+1.2%
ROTCE 20.0% → 2.45x TBV
Fair
$720.20
+44.5%
ROTCE 25.0% → 3.21x TBV
Bull
$936.26
+87.9%
ROTCE 30.0% → 3.98x TBV
Adjust Assumptions
54.4%
10.5%
Key Value Driver
ROTCE (54.4%) vs. cost of equity (10.5%)
Implied Market Multiple
6.84x
Analyst Consensus (External Reference)
Never blended into the bear/base/bull estimates above.
Average Target (22 analysts)
$556.67
Divergence from AlphaVal
29%
Summary
With ROTCE of 54.4% vs. 10.5% cost of equity, fair P/TBV is 3.21x on $72.85 tangible book, implying $720.20 per share. DDM cross-check: $186.29.
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: $186.29 (74% below our primary estimate). Large gaps suggest the dividend may not fully reflect the company's value.
Wall Street's average price target is $556.67 (from 22 analysts). Our estimate is 29% 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