BHF
Brighthouse Financial, Inc.
$62.47
Banks, Insurers & Asset Managers
85%
P/Tangible Book × ROE Quality
Moderate
·
Conviction
Undervalued
Trading 37.6% below fair value
You pay
$62.47
Bear
$70.08
Fair
$100.11
Bull
$130.15
Bear
$70.08
+12.2%
ROTCE 4.8% → 0.30x TBV
Fair
$100.11
+60.2%
ROTCE 6.4% → 0.47x TBV
Bull
$130.15
+108.3%
ROTCE 7.4% → 0.66x TBV
Key Value Driver
ROTCE (6.4%) vs. cost of equity (9.1%)
Implied Market Multiple
0.53x
Summary
Our base-case estimate uses P/Tangible Book × ROE Quality. We then blend that result with the average analyst price target of $65.00 from 20 analysts, using a 25% weight on analyst consensus. That produces an estimated intrinsic value of $100.11 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.
Return on equity (6.4%) is below the minimum investors require (9.1%). This means the bank is worth less than the net assets on its books.
Wall Street's average price target is $65.00 (from 20 analysts). Our estimate is 72% above the consensus -- consider that gap carefully.
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