BKU
BankUnited, Inc.
$46.22
Banks, Insurers & Asset Managers
85%
P/Tangible Book × ROE Quality
Mild
·
Conviction
Overvalued
Trading 8.4% above fair value
You pay
$46.22
Bear
$29.85
Fair
$42.64
Bull
$55.43
Bear
$29.85
-35.4%
ROTCE 6.8% → 0.41x TBV
Fair
$42.64
-7.7%
ROTCE 9.0% → 0.74x TBV
Bull
$55.43
+19.9%
ROTCE 10.4% → 0.94x TBV
Key Value Driver
ROTCE (9.0%) vs. cost of equity (10.8%)
Implied Market Multiple
1.13x
Summary
Our base-case estimate uses P/Tangible Book × ROE Quality. We then blend that result with the average analyst price target of $53.75 from 29 analysts, using a 25% weight on analyst consensus. That produces an estimated intrinsic value of $42.64 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 (9.0%) is below the minimum investors require (10.8%). This means the bank is worth less than the net assets on its books.
Dividend-based valuation: $28.03 (28% below our primary estimate). Large gaps suggest the dividend may not fully reflect the company's value.
Wall Street's average price target is $53.75 (from 29 analysts). Our estimate is 28% below 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