CADE
Cadence Bank
$42.11
Banks, Insurers & Asset Managers
85%
P/Tangible Book × ROE Quality
Mild
·
Conviction
Overvalued
Trading 2.5% above fair value
You pay
$42.11
Bear
$28.77
Fair
$41.10
Bull
$53.43
Bear
$28.77
-31.7%
ROTCE 8.9% → 0.89x TBV
Fair
$41.10
-2.4%
ROTCE 11.9% → 1.42x TBV
Bull
$53.43
+26.9%
ROTCE 13.6% → 1.74x TBV
Key Value Driver
ROTCE (11.9%) vs. cost of equity (9.5%)
Implied Market Multiple
1.71x
Summary
Our base-case estimate uses P/Tangible Book × ROE Quality. We then blend that result with the average analyst price target of $39.75 from 20 analysts, using a 25% weight on analyst consensus. That produces an estimated intrinsic value of $41.10 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: $65.26 (57% 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