CNA
CNA Financial Corporation
$50.91
Banks, Insurers & Asset Managers
85%
P/Tangible Book × ROE Quality
Strong
·
Conviction
Undervalued
Trading 61.7% below fair value
You pay
$50.91
Bear
$85.48
Fair
$133.05
Bull
$133.05
Bear
$85.48
+67.9%
ROTCE 9.1% → 2.57x TBV
Fair
$133.05
+161.3%
ROTCE 12.2% → 4.00x TBV
Bull
$133.05
+161.3%
ROTCE 14.0% → 4.00x TBV
Key Value Driver
ROTCE (12.2%) vs. cost of equity (6.0%)
Implied Market Multiple
1.31x
Summary
Our base-case estimate uses P/Tangible Book × ROE Quality. We then blend that result with the average analyst price target of $45.00 from 7 analysts, using a 20% weight on analyst consensus. That produces an estimated intrinsic value of $133.05 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: $92.58 (40% below our primary estimate). Large gaps suggest the dividend may not fully reflect the company's value.
Wall Street's average price target is $45.00 (from 7 analysts). Our estimate is 245% 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