BN
Brookfield Corporation
$38.17
Banks, Insurers & Asset Managers
90%
P/Tangible Book × ROE Quality
Strong
·
Conviction
Overvalued
Trading 211.9% above fair value
You pay
$38.17
Bear
$8.57
Fair
$12.24
Bull
$15.91
Bear
$8.57
-77.6%
ROTCE 4.0% → 0.30x TBV
Fair
$12.24
-67.9%
ROTCE 2.7% → 0.30x TBV
Bull
$15.91
-58.3%
ROTCE 3.1% → 0.30x TBV
Adjust Assumptions
2.7%
14.0%
Key Value Driver
ROTCE (2.7%) vs. cost of equity (14.0%)
Implied Market Multiple
1.78x
Analyst Consensus (External Reference)
Never blended into the bear/base/bull estimates above.
Average Target (9 analysts)
$58.50
Divergence from AlphaVal
79%
Summary
With ROTCE of 2.7% vs. 14.0% cost of equity, fair P/TBV is 0.30x on $21.40 tangible book, implying $12.24 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 $58.50 (from 9 analysts). Our estimate is 79% 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