APAM
Artisan Partners Asset Management Inc.
$37.78
Banks, Insurers & Asset Managers
85%
P/Tangible Book × ROE Quality
Strong
·
Conviction
Undervalued
Trading 53.6% below fair value
You pay
$37.78
Bear
$56.96
Fair
$81.37
Bull
$105.78
Bear
$56.96
+50.8%
ROTCE 20.0% → 1.68x TBV
Fair
$81.37
+115.4%
ROTCE 25.0% → 4.00x TBV
Bull
$105.78
+180.0%
ROTCE 30.0% → 2.72x TBV
Key Value Driver
ROTCE (66.2%) vs. cost of equity (13.5%)
Implied Market Multiple
6.11x
Summary
Our base-case estimate uses P/Tangible Book × ROE Quality. We then blend that result with the average analyst price target of $40.00 from 15 analysts, using a 25% weight on analyst consensus. That produces an estimated intrinsic value of $81.37 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.
Wall Street's average price target is $40.00 (from 15 analysts). Our estimate is 138% 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