BAM
Brookfield Asset Management Ltd.
$46.72
Banks, Insurers & Asset Managers
85%
P/Tangible Book × ROE Quality
Mild
·
Conviction
Fair Value
Trading 10.2% below fair value
You pay
$46.72
Bear
$36.40
Fair
$52.00
Bull
$67.60
Bear
$36.40
-22.1%
ROTCE 20.0% → 2.21x TBV
Fair
$52.00
+11.3%
ROTCE 25.0% → 3.53x TBV
Bull
$67.60
+44.7%
ROTCE 30.0% → 3.60x TBV
Key Value Driver
ROTCE (29.5%) vs. cost of equity (11.2%)
Implied Market Multiple
8.85x
Summary
Our base-case estimate uses P/Tangible Book × ROE Quality. We then blend that result with the average analyst price target of $58.21 from 20 analysts, using a 25% weight on analyst consensus. That produces an estimated intrinsic value of $52.00 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.
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