CFR
Cullen/Frost Bankers, Inc.
$139.38
Banks, Insurers & Asset Managers
85%
P/Tangible Book × ROE Quality
Moderate
·
Conviction
Undervalued
Trading 28.9% below fair value
You pay
$139.38
Bear
$127.69
Fair
$195.91
Bull
$236.84
Bear
$127.69
-8.4%
ROTCE 10.6% → 1.91x TBV
Fair
$195.91
+40.6%
ROTCE 14.2% → 2.94x TBV
Bull
$236.84
+69.9%
ROTCE 16.3% → 3.55x TBV
Key Value Driver
ROTCE (14.2%) vs. cost of equity (7.5%)
Implied Market Multiple
1.91x
Summary
Our base-case estimate uses P/Tangible Book × ROE Quality. We then blend that result with the average analyst price target of $154.13 from 33 analysts, using a 30% weight on analyst consensus. That produces an estimated intrinsic value of $195.91 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: $308.18 (44% above our primary estimate). Large gaps suggest the dividend may not fully reflect the company's value.
Wall Street's average price target is $154.13 (from 33 analysts). Our estimate is 39% 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