BAM
Brookfield Asset Management Ltd.
$46.18
Banks, Insurers & Asset Managers
85%
P/Tangible Book × ROE Quality
Mild
·
Conviction
Fair Value
Trading 7.5% below fair value
You pay
$46.18
Bear
$34.94
Fair
$49.92
Bull
$64.90
Bear
$34.94
-24.3%
ROTCE 20.0% → 2.15x TBV
Fair
$49.92
+8.1%
ROTCE 25.0% → 2.83x TBV
Bull
$64.90
+40.5%
ROTCE 30.0% → 3.50x TBV
Adjust Assumptions
29.5%
11.4%
Key Value Driver
ROTCE (29.5%) vs. cost of equity (11.4%)
Implied Market Multiple
8.75x
Analyst Consensus (External Reference)
Never blended into the bear/base/bull estimates above.
Average Target (20 analysts)
$55.58
Divergence from AlphaVal
10%
Summary
With ROTCE of 29.5% vs. 11.4% cost of equity, fair P/TBV is 2.83x on $5.28 tangible book, implying $49.92 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