CFG
Citizens Financial Group, Inc.
$72.94
Banks, Insurers & Asset Managers
85%
P/Tangible Book × ROE Quality
Mild
·
Conviction
Overvalued
Trading 13.8% above fair value
You pay
$72.94
Bear
$44.87
Fair
$64.10
Bull
$83.33
Bear
$44.87
-38.5%
ROTCE 7.6% → 0.63x TBV
Fair
$64.10
-12.1%
ROTCE 10.2% → 1.06x TBV
Bull
$83.33
+14.2%
ROTCE 11.7% → 1.33x TBV
Key Value Driver
ROTCE (10.2%) vs. cost of equity (9.8%)
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 $78.57 from 38 analysts, using a 30% weight on analyst consensus. That produces an estimated intrinsic value of $64.10 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: $27.76 (52% below our primary estimate). Large gaps suggest the dividend may not fully reflect the company's value.
Wall Street's average price target is $78.57 (from 38 analysts). Our estimate is 26% 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