AXP
American Express Company
$355.35
Banks, Insurers & Asset Managers
80%
P/Tangible Book × ROE Quality
Moderate
·
Conviction
Overvalued
Trading 20.9% above fair value
You pay
$355.35
Bear
$205.78
Fair
$293.98
Bull
$382.17
Bear
$205.78
-42.1%
ROTCE 20.0% → 2.65x TBV
Fair
$293.98
-17.3%
ROTCE 25.0% → 4.00x TBV
Bull
$382.17
+7.5%
ROTCE 30.0% → 4.00x TBV
Key Value Driver
ROTCE (38.0%) vs. cost of equity (10.0%)
Implied Market Multiple
8.5x
Summary
Our base-case estimate uses P/Tangible Book × ROE Quality. We then blend that result with the average analyst price target of $381.92 from 57 analysts, using a 35% weight on analyst consensus. That produces an estimated intrinsic value of $293.98 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 $381.92 (from 57 analysts). Our estimate is 35% 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