CB
Chubb Limited
$349.85
Banks, Insurers & Asset Managers
85%
P/Tangible Book × ROE Quality
Moderate
·
Conviction
Undervalued
Trading 27.1% below fair value
You pay
$349.85
Bear
$355.89
Fair
$479.60
Bull
$623.48
Bear
$355.89
+1.7%
ROTCE 20.0% → 4.00x TBV
Fair
$479.60
+37.1%
ROTCE 25.0% → 4.00x TBV
Bull
$623.48
+78.2%
ROTCE 30.0% → 4.00x TBV
Adjust Assumptions
30.0%
6.3%
Key Value Driver
ROTCE (30.0%) vs. cost of equity (6.3%)
Implied Market Multiple
3.93x
Analyst Consensus (External Reference)
Never blended into the bear/base/bull estimates above.
Average Target (43 analysts)
$354.64
Divergence from AlphaVal
35%
Summary
With ROTCE of 30.0% vs. 6.3% cost of equity, fair P/TBV is 4.00x on $88.97 tangible book, implying $479.60 per share. DDM cross-check: $184.81.
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: $184.81 (61% below our primary estimate). Large gaps suggest the dividend may not fully reflect the company's value.
Wall Street's average price target is $354.64 (from 43 analysts). Our estimate is 35% 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