CFG
Citizens Financial Group, Inc.
$63.30
Banks, Insurers & Asset Managers
85%
P/Tangible Book × ROE Quality
Mild
·
Conviction
Overvalued
Trading 9.3% above fair value
You pay
$63.30
Bear
$40.53
Fair
$57.90
Bull
$75.27
Bear
$40.53
-36.0%
ROTCE 7.6% → 0.59x TBV
Fair
$57.90
-8.5%
ROTCE 10.2% → 1.00x TBV
Bull
$75.27
+18.9%
ROTCE 11.7% → 1.25x TBV
Adjust Assumptions
10.2%
10.1%
Key Value Driver
ROTCE (10.2%) vs. cost of equity (10.1%)
Implied Market Multiple
1.49x
Analyst Consensus (External Reference)
Never blended into the bear/base/bull estimates above.
Average Target (38 analysts)
$79.33
Divergence from AlphaVal
27%
Summary
With ROTCE of 10.2% vs. 10.1% cost of equity, fair P/TBV is 1.00x on $42.60 tangible book, implying $57.90 per share. DDM cross-check: $26.40.
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: $26.40 (54% below our primary estimate). Large gaps suggest the dividend may not fully reflect the company's value.
Wall Street's average price target is $79.33 (from 38 analysts). Our estimate is 27% 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