BNY
Bank of New York Mellon Corp
$139.15
Banks, Insurers & Asset Managers
85%
P/Tangible Book × ROE Quality
Mild
·
Conviction
Overvalued
Trading 14.6% above fair value
You pay
$139.15
Bear
$85.03
Fair
$121.47
Bull
$157.91
Bear
$85.03
-38.9%
ROTCE 16.8% → 2.08x TBV
Fair
$121.47
-12.7%
ROTCE 22.4% → 2.99x TBV
Bull
$157.91
+13.5%
ROTCE 25.8% → 3.53x TBV
Key Value Driver
ROTCE (22.4%) vs. cost of equity (10.2%)
Implied Market Multiple
3.86x
Summary
Our base-case estimate uses P/Tangible Book × ROE Quality. We then blend that result with the average analyst price target of $139.86 from 15 analysts, using a 25% weight on analyst consensus. That produces an estimated intrinsic value of $121.47 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.
Dividend-based valuation: $260.53 (126% above our primary estimate). Large gaps suggest the dividend may not fully reflect the company's value.
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