CINF
Cincinnati Financial Corporation
$182.81
Banks, Insurers & Asset Managers
85%
P/Tangible Book × ROE Quality
Strong
·
Conviction
Undervalued
Trading 41.3% below fair value
You pay
$182.81
Bear
$208.45
Fair
$311.35
Bull
$334.85
Bear
$208.45
+14.0%
ROTCE 12.3% → 2.49x TBV
Fair
$311.35
+70.3%
ROTCE 16.4% → 3.72x TBV
Bull
$334.85
+83.2%
ROTCE 18.9% → 4.00x TBV
Key Value Driver
ROTCE (16.4%) vs. cost of equity (7.3%)
Implied Market Multiple
1.94x
Summary
Our base-case estimate uses P/Tangible Book × ROE Quality. We then blend that result with the average analyst price target of $194.67 from 17 analysts, using a 25% weight on analyst consensus. That produces an estimated intrinsic value of $311.35 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: $467.95 (34% above our primary estimate). Large gaps suggest the dividend may not fully reflect the company's value.
Wall Street's average price target is $194.67 (from 17 analysts). Our estimate is 80% 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