CNA
CNA Financial Corporation
$47.67
Banks, Insurers & Asset Managers
85%
P/Tangible Book × ROE Quality
Strong
·
Conviction
Undervalued
Trading 69.2% below fair value
You pay
$47.67
Bear
$99.60
Fair
$155.02
Bull
$155.02
Bear
$99.60
+108.9%
ROTCE 9.1% → 2.57x TBV
Fair
$155.02
+225.2%
ROTCE 12.2% → 4.00x TBV
Bull
$155.02
+225.2%
ROTCE 14.0% → 4.00x TBV
Adjust Assumptions
12.2%
6.0%
Key Value Driver
ROTCE (12.2%) vs. cost of equity (6.0%)
Implied Market Multiple
1.23x
Analyst Consensus (External Reference)
Never blended into the bear/base/bull estimates above.
Average Target (7 analysts)
$45.00
Divergence from AlphaVal
244%
Summary
With ROTCE of 12.2% vs. 6.0% cost of equity, fair P/TBV is 4.00x on $38.75 tangible book, implying $155.02 per share. DDM cross-check: $92.85.
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: $92.85 (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 244% 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