BPOP
Popular, Inc.
$168.49
Banks, Insurers & Asset Managers
85%
P/Tangible Book × ROE Quality
Moderate
·
Conviction
Undervalued
Trading 35.9% below fair value
You pay
$168.49
Bear
$175.33
Fair
$262.72
Bull
$315.15
Bear
$175.33
+4.1%
ROTCE 12.1% → 2.16x TBV
Fair
$262.72
+55.9%
ROTCE 16.1% → 3.24x TBV
Bull
$315.15
+87.0%
ROTCE 18.5% → 3.89x TBV
Adjust Assumptions
16.1%
7.7%
Key Value Driver
ROTCE (16.1%) vs. cost of equity (7.7%)
Implied Market Multiple
2.08x
Analyst Consensus (External Reference)
Never blended into the bear/base/bull estimates above.
Average Target (21 analysts)
$187.57
Divergence from AlphaVal
40%
Summary
With ROTCE of 16.1% vs. 7.7% cost of equity, fair P/TBV is 3.24x on $81.02 tangible book, implying $262.72 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.
Wall Street's average price target is $187.57 (from 21 analysts). Our estimate is 40% above 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