BLK
BlackRock, Inc.
$1,070.55
Banks, Insurers & Asset Managers
85%
P/Tangible Book × ROE Quality
Mild
·
Conviction
Overvalued
Trading 12.8% above fair value
You pay
$1,070.55
Bear
$664.48
Fair
$949.26
Bull
$1,234.04
Bear
$664.48
-37.9%
ROTCE 7.5% → 0.42x TBV
Fair
$949.26
-11.3%
ROTCE 9.9% → 0.73x TBV
Bull
$1,234.04
+15.3%
ROTCE 11.4% → 0.91x TBV
Adjust Assumptions
9.9%
12.2%
Key Value Driver
ROTCE (9.9%) vs. cost of equity (12.2%)
Implied Market Multiple
2.97x
Analyst Consensus (External Reference)
Never blended into the bear/base/bull estimates above.
Average Target (33 analysts)
$1336.57
Divergence from AlphaVal
29%
Summary
With ROTCE of 9.9% vs. 12.2% cost of equity, fair P/TBV is 0.73x on $360.58 tangible book, implying $949.26 per share. DDM cross-check: $271.09.
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: $271.09 (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 $1336.57 (from 33 analysts). Our estimate is 29% 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