APO
Apollo Global Management, Inc.
$118.65
Banks, Insurers & Asset Managers
85%
P/Tangible Book × ROE Quality
Moderate
·
Conviction
Undervalued
Trading 37.7% below fair value
You pay
$118.65
Bear
$133.22
Fair
$190.32
Bull
$247.42
Bear
$133.22
+12.3%
ROTCE 15.0% → 1.23x TBV
Fair
$190.32
+60.4%
ROTCE 20.0% → 1.78x TBV
Bull
$247.42
+108.5%
ROTCE 23.1% → 2.12x TBV
Adjust Assumptions
20.0%
13.0%
Key Value Driver
ROTCE (20.0%) vs. cost of equity (13.0%)
Implied Market Multiple
4.02x
Analyst Consensus (External Reference)
Never blended into the bear/base/bull estimates above.
Average Target (28 analysts)
$136.00
Divergence from AlphaVal
40%
Summary
With ROTCE of 20.0% vs. 13.0% cost of equity, fair P/TBV is 1.78x on $29.50 tangible book, implying $190.32 per share. DDM cross-check: $27.30.
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: $27.30 (86% below our primary estimate). Large gaps suggest the dividend may not fully reflect the company's value.
Wall Street's average price target is $136.00 (from 28 analysts). Our estimate is 40% 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