BNY
Bank of New York Mellon Corp
$160.09
Banks, Insurers & Asset Managers
85%
P/Tangible Book × ROE Quality
Moderate
·
Conviction
Overvalued
Trading 29.6% above fair value
You pay
$160.09
Bear
$85.96
Fair
$123.55
Bull
$146.11
Bear
$85.96
-46.3%
ROTCE 16.8% → 2.10x TBV
Fair
$123.55
-22.8%
ROTCE 22.4% → 3.01x TBV
Bull
$146.11
-8.7%
ROTCE 25.8% → 3.56x TBV
Key Value Driver
ROTCE (22.4%) vs. cost of equity (10.1%)
Implied Market Multiple
4.44x
Summary
Our base-case estimate uses P/Tangible Book × ROE Quality. We then blend that result with the average analyst price target of $168.50 from 21 analysts, using a 25% weight on analyst consensus. That produces an estimated intrinsic value of $123.55 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: $805.95 (642% above our primary estimate). Large gaps suggest the dividend may not fully reflect the company's value.
Wall Street's average price target is $168.50 (from 21 analysts). Our estimate is 36% below the consensus -- consider that gap carefully.
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