CARE
Carter Bankshares, Inc.
$33.35
Banks, Insurers & Asset Managers
85%
P/Tangible Book × ROE Quality
Strong
·
Conviction
Overvalued
Trading 46.8% above fair value
You pay
$33.35
Bear
$10.57
Fair
$22.72
Bull
$30.02
Bear
$10.57
-68.3%
ROTCE 5.6% → 0.53x TBV
Fair
$22.72
-31.9%
ROTCE 7.5% → 1.13x TBV
Bull
$30.02
-10.0%
ROTCE 8.6% → 1.50x TBV
Key Value Driver
ROTCE (7.5%) vs. cost of equity (7.1%)
Implied Market Multiple
1.77x
Summary
Our base-case estimate uses P/Tangible Book × ROE Quality. We then blend that result with the average analyst price target of $28.50 from 5 analysts, using a 20% weight on analyst consensus. That produces an estimated intrinsic value of $22.72 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.
Dividend-based valuation: $8.67 (59% below our primary estimate). Large gaps suggest the dividend may not fully reflect the company's value.
Wall Street's average price target is $28.50 (from 5 analysts). Our estimate is 25% 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