AON
Aon plc
$367.35
Banks, Insurers & Asset Managers
90%
P/Tangible Book × ROE Quality
Moderate
·
Conviction
Overvalued
Trading 17.3% above fair value
You pay
$367.35
Bear
$219.22
Fair
$313.17
Bull
$407.12
Bear
$219.22
-40.3%
ROTCE 20.0% → 3.83x TBV
Fair
$313.17
-14.7%
ROTCE 25.0% → 4.00x TBV
Bull
$407.12
+10.8%
ROTCE 30.0% → 4.00x TBV
Key Value Driver
ROTCE (39.5%) vs. cost of equity (8.2%)
Implied Market Multiple
8.39x
Summary
Our base-case estimate uses P/Tangible Book × ROE Quality. We then blend that result with the average analyst price target of $402.75 from 38 analysts, using a 30% weight on analyst consensus. That produces an estimated intrinsic value of $313.17 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: $1222.16 (345% above our primary estimate). Large gaps suggest the dividend may not fully reflect the company's value.
Wall Street's average price target is $402.75 (from 38 analysts). Our estimate is 32% below 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