BEN
Franklin Resources, Inc.
$30.98
Banks, Insurers & Asset Managers
85%
P/Tangible Book × ROE Quality
Mild
·
Conviction
Fair Value
Trading 14.9% below fair value
You pay
$30.98
Bear
$25.48
Fair
$36.40
Bull
$47.32
Bear
$25.48
-17.8%
ROTCE 20.0% → 1.78x TBV
Fair
$36.40
+17.5%
ROTCE 25.0% → 2.34x TBV
Bull
$47.32
+52.7%
ROTCE 30.0% → 2.90x TBV
Adjust Assumptions
30.8%
13.0%
Key Value Driver
ROTCE (30.8%) vs. cost of equity (13.0%)
Implied Market Multiple
9.23x
Analyst Consensus (External Reference)
Never blended into the bear/base/bull estimates above.
Average Target (27 analysts)
$35.67
Divergence from AlphaVal
2%
Summary
With ROTCE of 30.8% vs. 13.0% cost of equity, fair P/TBV is 2.34x on $3.36 tangible book, implying $36.40 per share. DDM cross-check: $12.85.
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: $12.85 (65% below our primary estimate). Large gaps suggest the dividend may not fully reflect the company's value.
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