CINF
Cincinnati Financial Corporation
$167.22
Banks, Insurers & Asset Managers
85%
P/Tangible Book × ROE Quality
Strong
·
Conviction
Undervalued
Trading 54.6% below fair value
You pay
$167.22
Bear
$246.48
Fair
$368.14
Bull
$379.65
Bear
$246.48
+47.4%
ROTCE 12.3% → 2.60x TBV
Fair
$368.14
+120.2%
ROTCE 16.4% → 3.88x TBV
Bull
$379.65
+127.0%
ROTCE 18.9% → 4.00x TBV
Adjust Assumptions
16.4%
7.2%
Key Value Driver
ROTCE (16.4%) vs. cost of equity (7.2%)
Implied Market Multiple
1.76x
Analyst Consensus (External Reference)
Never blended into the bear/base/bull estimates above.
Average Target (17 analysts)
$198.00
Divergence from AlphaVal
86%
Summary
With ROTCE of 16.4% vs. 7.2% cost of equity, fair P/TBV is 3.88x on $94.91 tangible book, implying $368.14 per share. DDM cross-check: $518.72.
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: $518.72 (41% above our primary estimate). Large gaps suggest the dividend may not fully reflect the company's value.
Wall Street's average price target is $198.00 (from 17 analysts). Our estimate is 86% 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