CINF
Cincinnati Financial Corporation
$168.10
Banks, Insurers & Asset Managers
85%
P/Tangible Book × ROE Quality
Strong
·
Conviction
Undervalued
Trading 41.6% below fair value
You pay
$168.10
Bear
$192.78
Fair
$287.94
Bull
$332.62
Bear
$192.78
+14.7%
ROTCE 12.3% → 2.32x TBV
Fair
$287.94
+71.3%
ROTCE 16.4% → 3.46x TBV
Bull
$332.62
+97.9%
ROTCE 18.9% → 4.00x TBV
Key Value Driver
ROTCE (16.4%) vs. cost of equity (7.6%)
Implied Market Multiple
1.79x
Summary
Our base-case estimate uses P/Tangible Book × ROE Quality. We then blend that result with the average analyst price target of $173.50 from 17 analysts, using a 25% weight on analyst consensus. That produces an estimated intrinsic value of $287.94 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.
Wall Street's average price target is $173.50 (from 17 analysts). Our estimate is 88% 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