BAM
Brookfield Asset Management Ltd.
$47.93
Banks, Insurers & Asset Managers
85%
P/Tangible Book × ROE Quality
Moderate
·
Conviction
Undervalued
Trading 28.3% below fair value
You pay
$47.93
Bear
$46.78
Fair
$66.83
Bull
$86.88
Bear
$46.78
-2.4%
ROTCE 20.0% → 2.23x TBV
Fair
$66.83
+39.4%
ROTCE 25.0% → 3.63x TBV
Bull
$86.88
+81.3%
ROTCE 30.0% → 3.63x TBV
Key Value Driver
ROTCE (30.0%) vs. cost of equity (11.2%)
Implied Market Multiple
9.08x
Summary
Our base-case estimate uses P/Tangible Book × ROE Quality. We then blend that result with the average analyst price target of $58.44 from 20 analysts, using a 25% weight on analyst consensus. That produces an estimated intrinsic value of $66.83 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