BEN
Franklin Resources, Inc.
$31.02
Banks, Insurers & Asset Managers
85%
P/Tangible Book × ROE Quality
Mild
·
Conviction
Fair Value
Trading 11.5% below fair value
You pay
$31.02
Bear
$24.53
Fair
$35.05
Bull
$45.56
Bear
$24.53
-20.9%
ROTCE 20.0% → 1.77x TBV
Fair
$35.05
+13.0%
ROTCE 25.0% → 2.96x TBV
Bull
$45.56
+46.9%
ROTCE 30.0% → 2.87x TBV
Key Value Driver
ROTCE (30.8%) vs. cost of equity (13.1%)
Implied Market Multiple
9.45x
Summary
Our base-case estimate uses P/Tangible Book × ROE Quality. We then blend that result with the average analyst price target of $31.00 from 27 analysts, using a 25% weight on analyst consensus. That produces an estimated intrinsic value of $35.05 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.
Dividend-based valuation: $12.68 (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