BNPQY
BNP Paribas S.A.
$60.04
Banks, Insurers & Asset Managers
90%
P/Tangible Book × ROE Quality
Moderate
·
Conviction
Undervalued
Trading 31.4% below fair value
You pay
$60.04
Bear
$51.77
Fair
$87.48
Bull
$108.91
Bear
$51.77
-13.8%
ROTCE 7.7% → 0.89x TBV
Fair
$87.48
+45.7%
ROTCE 10.3% → 1.50x TBV
Bull
$108.91
+81.4%
ROTCE 11.9% → 1.87x TBV
Key Value Driver
ROTCE (10.3%) vs. cost of equity (8.2%)
Implied Market Multiple
1.03x
Summary
With ROTCE of 10.3% vs. 8.2% cost of equity, fair P/TBV is 1.50x on $58.30 tangible book, implying $87.48 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 1.1381 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