BNPQY
BNP Paribas S.A.
$48.82
Banks, Insurers & Asset Managers
90%
P/Tangible Book × ROE Quality
Moderate
·
Conviction
Undervalued
Trading 32.5% below fair value
You pay
$48.82
Bear
$50.59
Fair
$72.28
Bull
$93.96
Bear
$50.59
+3.6%
ROTCE 7.7% → 0.62x TBV
Fair
$72.28
+48.0%
ROTCE 10.3% → 1.05x TBV
Bull
$93.96
+92.5%
ROTCE 11.9% → 1.31x TBV
Adjust Assumptions
10.3%
10.0%
Key Value Driver
ROTCE (10.3%) vs. cost of equity (10.0%)
Implied Market Multiple
0.85x
Summary
With ROTCE of 10.3% vs. 10.0% cost of equity, fair P/TBV is 1.05x on $57.53 tangible book, implying $72.28 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.
Financial statements were converted from EUR into USD using EURUSD at 1.1232 USD per EUR.
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