BK
The Bank of New York Mellon Corporation
$141.91
Banks, Insurers & Asset Managers
85%
P/Tangible Book × ROE Quality
Moderate
·
Conviction
Overvalued
Trading 22.2% above fair value
You pay
$141.91
Bear
$80.82
Fair
$116.14
Bull
$137.34
Bear
$80.82
-43.1%
ROTCE 16.8% → 2.13x TBV
Fair
$116.14
-18.2%
ROTCE 22.4% → 3.06x TBV
Bull
$137.34
-3.2%
ROTCE 25.8% → 3.62x TBV
Key Value Driver
ROTCE (22.4%) vs. cost of equity (10.0%)
Implied Market Multiple
3.94x
Summary
Our base-case estimate uses P/Tangible Book × ROE Quality. We then blend that result with the average analyst price target of $133.50 from 29 analysts, using a 25% weight on analyst consensus. That produces an estimated intrinsic value of $116.14 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: $1198.05 (986% above 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