BLK
BlackRock, Inc.
$961.56
Banks, Insurers & Asset Managers
85%
P/Tangible Book × ROE Quality
Mild
·
Conviction
Fair Value
Trading 9.0% below fair value
You pay
$961.56
Bear
$739.45
Fair
$1,056.36
Bull
$1,373.27
Bear
$739.45
-23.1%
ROTCE 7.5% → 0.42x TBV
Fair
$1,056.36
+9.9%
ROTCE 9.9% → 0.73x TBV
Bull
$1,373.27
+42.8%
ROTCE 11.4% → 0.91x TBV
Key Value Driver
ROTCE (9.9%) vs. cost of equity (12.2%)
Implied Market Multiple
2.67x
Summary
Our base-case estimate uses P/Tangible Book × ROE Quality. We then blend that result with the average analyst price target of $1306.25 from 33 analysts, using a 30% weight on analyst consensus. That produces an estimated intrinsic value of $1056.36 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 (9.9%) is below the minimum investors require (12.2%). This means the bank is worth less than the net assets on its books.
Dividend-based valuation: $276.42 (71% below our primary estimate). Large gaps suggest the dividend may not fully reflect the company's value.
Wall Street's average price target is $1306.25 (from 33 analysts). Our estimate is 27% 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