BNPQY
BNP Paribas S.A.
$51.85
Banks, Insurers & Asset Managers
90%
P/Tangible Book × ROE Quality
Moderate
·
Conviction
Undervalued
Trading 30.7% below fair value
You pay
$51.85
Bear
$52.41
Fair
$74.87
Bull
$97.33
Bear
$52.41
+1.1%
ROTCE 7.7% → 0.61x TBV
Fair
$74.87
+44.4%
ROTCE 10.3% → 1.04x TBV
Bull
$97.33
+87.7%
ROTCE 11.9% → 1.29x TBV
Key Value Driver
ROTCE (10.3%) vs. cost of equity (10.1%)
Implied Market Multiple
0.86x
Summary
With ROTCE of 10.3% vs. 10.1% cost of equity, fair P/TBV is 1.04x on $60.18 tangible book, implying $74.87 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 1.1635 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