BBD
Banco Bradesco S.A.
$3.56
Banks, Insurers & Asset Managers
90%
P/Tangible Book × ROE Quality
Strong
·
Conviction
Undervalued
Trading 68.4% below fair value
You pay
$3.56
Bear
$10.74
Fair
$11.26
Bull
$11.26
Bear
$10.74
+201.7%
ROTCE 11.6% → 3.81x TBV
Fair
$11.26
+216.4%
ROTCE 15.5% → 4.00x TBV
Bull
$11.26
+216.4%
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
1.26x
Analyst Consensus (External Reference)
Never blended into the bear/base/bull estimates above.
Average Target (16 analysts)
$3.20
Divergence from AlphaVal
252%
Summary
With ROTCE of 15.5% vs. 6.0% cost of equity, fair P/TBV is 4.00x on $2.82 tangible book, implying $11.26 per share. DDM cross-check: $2.72.
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: $2.72 (76% below our primary estimate). Large gaps suggest the dividend may not fully reflect the company's value.
Wall Street's average price target is $3.20 (from 16 analysts). Our estimate is 252% above the consensus -- consider that gap carefully.
Financial statements were converted from BRL into USD using USDBRL at 0.1951 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