BN
Brookfield Corporation
$45.37
Banks, Insurers & Asset Managers
90%
P/Tangible Book × ROE Quality
Strong
·
Conviction
Overvalued
Trading 79.1% above fair value
You pay
$45.37
Bear
$17.74
Fair
$25.34
Bull
$32.94
Bear
$17.74
-60.9%
ROTCE 4.0% → 0.30x TBV
Fair
$25.34
-44.2%
ROTCE 2.7% → 0.30x TBV
Bull
$32.94
-27.4%
ROTCE 3.1% → 0.30x TBV
Key Value Driver
ROTCE (2.7%) vs. cost of equity (14.0%)
Implied Market Multiple
2.12x
Summary
Our base-case estimate uses P/Tangible Book × ROE Quality. We then blend that result with the average analyst price target of $56.80 from 9 analysts, using a 20% weight on analyst consensus. That produces an estimated intrinsic value of $25.34 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 (2.7%) is below the minimum investors require (14.0%). This means the bank is worth less than the net assets on its books.
Wall Street's average price target is $56.80 (from 9 analysts). Our estimate is 69% 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