AON
Aon plc
$274.66
Banks, Insurers & Asset Managers
90%
P/Tangible Book × ROE Quality
Mild
·
Conviction
Fair Value
Trading 0.0% below fair value
You pay
$274.66
Bear
$192.35
Fair
$274.78
Bull
$357.21
Bear
$192.35
-30.0%
ROTCE 20.0% → 3.90x TBV
Fair
$274.78
+0.0%
ROTCE 25.0% → 4.00x TBV
Bull
$357.21
+30.1%
ROTCE 30.0% → 4.00x TBV
Adjust Assumptions
39.5%
8.1%
Key Value Driver
ROTCE (39.5%) vs. cost of equity (8.1%)
Implied Market Multiple
6.23x
Analyst Consensus (External Reference)
Never blended into the bear/base/bull estimates above.
Average Target (38 analysts)
$361.30
Divergence from AlphaVal
24%
Summary
With ROTCE of 39.5% vs. 8.1% cost of equity, fair P/TBV is 4.00x on $44.09 tangible book, implying $274.78 per share. DDM cross-check: $1694.24.
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: $1694.24 (517% above our primary estimate). Large gaps suggest the dividend may not fully reflect the company's value.
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