AON
Aon plc
$324.78
Banks, Insurers & Asset Managers
90%
P/Tangible Book × ROE Quality
Mild
·
Conviction
Overvalued
Trading 3.9% above fair value
You pay
$324.78
Bear
$218.90
Fair
$312.71
Bull
$406.51
Bear
$218.90
-32.6%
ROTCE 20.0% → 3.79x TBV
Fair
$312.71
-3.7%
ROTCE 25.0% → 4.00x TBV
Bull
$406.51
+25.2%
ROTCE 30.0% → 4.00x TBV
Key Value Driver
ROTCE (39.5%) vs. cost of equity (8.2%)
Implied Market Multiple
7.42x
Summary
Our base-case estimate uses P/Tangible Book × ROE Quality. We then blend that result with the average analyst price target of $401.20 from 38 analysts, using a 30% weight on analyst consensus. That produces an estimated intrinsic value of $312.71 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: $972.15 (254% above our primary estimate). Large gaps suggest the dividend may not fully reflect the company's value.
Wall Street's average price target is $401.20 (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