BEN
Franklin Resources, Inc.
$32.83
Banks, Insurers & Asset Managers
85%
P/Tangible Book × ROE Quality
Mild
·
Conviction
Fair Value
Trading 8.5% below fair value
You pay
$32.83
Bear
$25.10
Fair
$35.86
Bull
$46.62
Bear
$25.10
-23.5%
ROTCE 20.0% → 1.78x TBV
Fair
$35.86
+9.2%
ROTCE 25.0% → 2.99x TBV
Bull
$46.62
+42.0%
ROTCE 30.0% → 2.90x TBV
Key Value Driver
ROTCE (30.8%) vs. cost of equity (13.0%)
Implied Market Multiple
10.0x
Summary
Our base-case estimate uses P/Tangible Book × ROE Quality. We then blend that result with the average analyst price target of $34.25 from 27 analysts, using a 25% weight on analyst consensus. That produces an estimated intrinsic value of $35.86 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: $12.78 (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