BX
Blackstone Inc.
$110.95
Banks, Insurers & Asset Managers
90%
P/Tangible Book × ROE Quality
Moderate
·
Conviction
Overvalued
Trading 17.9% above fair value
You pay
$110.95
Bear
$65.88
Fair
$94.12
Bull
$122.36
Bear
$65.88
-40.6%
ROTCE 20.0% → 1.77x TBV
Fair
$94.12
-15.2%
ROTCE 25.0% → 2.33x TBV
Bull
$122.36
+10.3%
ROTCE 30.0% → 2.88x TBV
Adjust Assumptions
45.4%
13.0%
Key Value Driver
ROTCE (45.4%) vs. cost of equity (13.0%)
Implied Market Multiple
13.16x
Analyst Consensus (External Reference)
Never blended into the bear/base/bull estimates above.
Average Target (30 analysts)
$143.10
Divergence from AlphaVal
34%
Summary
With ROTCE of 45.4% vs. 13.0% cost of equity, fair P/TBV is 2.33x on $8.43 tangible book, implying $94.12 per share. DDM cross-check: $67.83.
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: $67.83 (28% below our primary estimate). Large gaps suggest the dividend may not fully reflect the company's value.
Wall Street's average price target is $143.10 (from 30 analysts). Our estimate is 34% 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