BRO
Brown & Brown, Inc.
$67.66
Banks, Insurers & Asset Managers
85%
P/Tangible Book × ROE Quality
Strong
·
Conviction
Overvalued
Trading 40.3% above fair value
You pay
$67.66
Bear
$25.21
Fair
$48.22
Bull
$62.03
Bear
$25.21
-62.7%
ROTCE 6.3% → 0.64x TBV
Fair
$48.22
-28.7%
ROTCE 8.4% → 1.22x TBV
Bull
$62.03
-8.3%
ROTCE 9.7% → 1.57x TBV
Key Value Driver
ROTCE (8.4%) vs. cost of equity (7.6%)
Implied Market Multiple
1.83x
Summary
Our base-case estimate uses P/Tangible Book × ROE Quality. We then blend that result with the average analyst price target of $55.00 from 31 analysts, using a 30% weight on analyst consensus. That produces an estimated intrinsic value of $48.22 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.
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