BKU
BankUnited, Inc.
$43.16
Banks, Insurers & Asset Managers
85%
P/Tangible Book × ROE Quality
Mild
·
Conviction
Overvalued
Trading 10.8% above fair value
You pay
$43.16
Bear
$27.26
Fair
$38.94
Bull
$50.62
Bear
$27.26
-36.8%
ROTCE 6.8% → 0.40x TBV
Fair
$38.94
-9.8%
ROTCE 9.0% → 0.73x TBV
Bull
$50.62
+17.3%
ROTCE 10.4% → 0.92x TBV
Adjust Assumptions
9.0%
10.9%
Key Value Driver
ROTCE (9.0%) vs. cost of equity (10.9%)
Implied Market Multiple
1.03x
Analyst Consensus (External Reference)
Never blended into the bear/base/bull estimates above.
Average Target (30 analysts)
$48.50
Divergence from AlphaVal
20%
Summary
With ROTCE of 9.0% vs. 10.9% cost of equity, fair P/TBV is 0.73x on $41.78 tangible book, implying $38.94 per share. DDM cross-check: $27.05.
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 (9.0%) is below the minimum investors require (10.9%). This means the bank is worth less than the net assets on its books.
Dividend-based valuation: $27.05 (31% 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