CFG
Citizens Financial Group, Inc.
$62.89
Banks, Insurers & Asset Managers
85%
P/Tangible Book × ROE Quality
Mild
·
Conviction
Overvalued
Trading 1.0% above fair value
You pay
$62.89
Bear
$43.58
Fair
$62.26
Bull
$80.93
Bear
$43.58
-30.7%
ROTCE 7.6% → 0.60x TBV
Fair
$62.26
-1.0%
ROTCE 10.2% → 1.02x TBV
Bull
$80.93
+28.7%
ROTCE 11.7% → 1.28x TBV
Key Value Driver
ROTCE (10.2%) vs. cost of equity (10.0%)
Implied Market Multiple
1.48x
Summary
Our base-case estimate uses P/Tangible Book × ROE Quality. We then blend that result with the average analyst price target of $72.42 from 38 analysts, using a 30% weight on analyst consensus. That produces an estimated intrinsic value of $62.26 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: $26.01 (55% below 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