CNOB
ConnectOne Bancorp, Inc.
$30.22
Banks, Insurers & Asset Managers
85%
P/Tangible Book × ROE Quality
Moderate
·
Conviction
Overvalued
Trading 28.4% above fair value
You pay
$30.22
Bear
$16.48
Fair
$23.54
Bull
$30.60
Bear
$16.48
-45.5%
ROTCE 4.7% → 0.30x TBV
Fair
$23.54
-22.1%
ROTCE 6.2% → 0.36x TBV
Bull
$30.60
+1.3%
ROTCE 7.2% → 0.51x TBV
Adjust Assumptions
6.2%
10.2%
Key Value Driver
ROTCE (6.2%) vs. cost of equity (10.2%)
Implied Market Multiple
1.18x
Analyst Consensus (External Reference)
Never blended into the bear/base/bull estimates above.
Average Target (11 analysts)
$34.00
Divergence from AlphaVal
31%
Summary
With ROTCE of 6.2% vs. 10.2% cost of equity, fair P/TBV is 0.36x on $25.72 tangible book, implying $23.54 per share. DDM cross-check: $17.38.
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 (10.2%). This means the bank is worth less than the net assets on its books.
Dividend-based valuation: $17.38 (26% below our primary estimate). Large gaps suggest the dividend may not fully reflect the company's value.
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