CNOB
ConnectOne Bancorp, Inc.
$29.76
Banks, Insurers & Asset Managers
85%
P/Tangible Book × ROE Quality
Moderate
·
Conviction
Overvalued
Trading 16.1% above fair value
You pay
$29.76
Bear
$17.94
Fair
$25.63
Bull
$33.32
Bear
$17.94
-39.7%
ROTCE 4.7% → 0.30x TBV
Fair
$25.63
-13.9%
ROTCE 6.2% → 0.36x TBV
Bull
$33.32
+12.0%
ROTCE 7.2% → 0.52x TBV
Key Value Driver
ROTCE (6.2%) vs. cost of equity (10.1%)
Implied Market Multiple
1.16x
Summary
Our base-case estimate uses P/Tangible Book × ROE Quality. We then blend that result with the average analyst price target of $34.00 from 11 analysts, using a 20% weight on analyst consensus. That produces an estimated intrinsic value of $25.63 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.
Return on equity (6.2%) is below the minimum investors require (10.1%). This means the bank is worth less than the net assets on its books.
Wall Street's average price target is $34.00 (from 11 analysts). Our estimate is 31% below 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