BHF
Brighthouse Financial, Inc.
$47.77
Banks, Insurers & Asset Managers
85%
P/Tangible Book × ROE Quality
Strong
·
Conviction
Undervalued
Trading 61.3% below fair value
You pay
$47.77
Bear
$84.60
Fair
$123.29
Bull
$146.50
Bear
$84.60
+77.1%
ROTCE 14.8% → 2.21x TBV
Fair
$123.29
+158.1%
ROTCE 19.7% → 3.22x TBV
Bull
$146.50
+206.7%
ROTCE 22.6% → 3.83x TBV
Adjust Assumptions
19.7%
8.9%
Key Value Driver
ROTCE (19.7%) vs. cost of equity (8.9%)
Implied Market Multiple
1.25x
Analyst Consensus (External Reference)
Never blended into the bear/base/bull estimates above.
Average Target (20 analysts)
$57.44
Divergence from AlphaVal
115%
Summary
With ROTCE of 19.7% vs. 8.9% cost of equity, fair P/TBV is 3.22x on $38.27 tangible book, implying $123.29 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.
Wall Street's average price target is $57.44 (from 20 analysts). Our estimate is 115% 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