BNS
The Bank of Nova Scotia
$92.84
Banks, Insurers & Asset Managers
90%
P/Tangible Book × ROE Quality
Moderate
·
Conviction
Overvalued
Trading 35.2% above fair value
You pay
$92.84
Bear
$48.05
Fair
$68.65
Bull
$89.24
Bear
$48.05
-48.2%
ROTCE 8.3% → 0.61x TBV
Fair
$68.65
-26.1%
ROTCE 11.0% → 1.01x TBV
Bull
$89.24
-3.9%
ROTCE 12.7% → 1.25x TBV
Adjust Assumptions
11.0%
10.9%
Key Value Driver
ROTCE (11.0%) vs. cost of equity (10.9%)
Implied Market Multiple
2.22x
Analyst Consensus (External Reference)
Never blended into the bear/base/bull estimates above.
Average Target (19 analysts)
$72.15
Divergence from AlphaVal
5%
Summary
With ROTCE of 11.0% vs. 10.9% cost of equity, fair P/TBV is 1.01x on $41.82 tangible book, implying $68.65 per share. DDM cross-check: $32.65.
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.
Dividend-based valuation: $32.65 (52% below our primary estimate). Large gaps suggest the dividend may not fully reflect the company's value.
Financial statements were converted from CAD into USD using USDCAD at 0.7211 USD per CAD.
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