BBD
Banco Bradesco S.A.
$3.04
Banks, Insurers & Asset Managers
90%
P/Tangible Book × ROE Quality
Strong
·
Conviction
Undervalued
Trading 71.8% below fair value
You pay
$3.04
Bear
$10.29
Fair
$10.79
Bull
$10.79
Bear
$10.29
+237.9%
ROTCE 11.6% → 3.81x TBV
Fair
$10.79
+254.4%
ROTCE 15.5% → 4.00x TBV
Bull
$10.79
+254.4%
ROTCE 17.8% → 4.00x TBV
Adjust Assumptions
15.5%
6.0%
Key Value Driver
ROTCE (15.5%) vs. cost of equity (6.0%)
Implied Market Multiple
1.13x
Analyst Consensus (External Reference)
Never blended into the bear/base/bull estimates above.
Average Target (16 analysts)
$4.05
Divergence from AlphaVal
166%
Summary
With ROTCE of 15.5% vs. 6.0% cost of equity, fair P/TBV is 4.00x on $2.70 tangible book, implying $10.79 per share. DDM cross-check: $3.90.
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: $3.90 (64% below our primary estimate). Large gaps suggest the dividend may not fully reflect the company's value.
Wall Street's average price target is $4.05 (from 16 analysts). Our estimate is 166% above the consensus -- consider that gap carefully.
Financial statements were converted from BRL into USD using USDBRL at 0.1869 USD per BRL.
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