COF
Capital One Financial Corporation
$212.41
Banks, Insurers & Asset Managers
80%
P/Tangible Book × ROE Quality
Mild
·
Conviction
Overvalued
Trading 3.5% above fair value
You pay
$212.41
Bear
$143.69
Fair
$205.27
Bull
$266.86
Bear
$143.69
-32.4%
ROTCE 4.0% → 0.30x TBV
Fair
$205.27
-3.4%
ROTCE 3.6% → 0.30x TBV
Bull
$266.86
+25.6%
ROTCE 4.1% → 0.30x TBV
Key Value Driver
ROTCE (3.6%) vs. cost of equity (9.9%)
Implied Market Multiple
1.9x
Summary
Our base-case estimate uses P/Tangible Book × ROE Quality. We then blend that result with the average analyst price target of $253.60 from 57 analysts, using a 35% weight on analyst consensus. That produces an estimated intrinsic value of $205.27 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 (3.6%) is below the minimum investors require (9.9%). This means the bank is worth less than the net assets on its books.
Wall Street's average price target is $253.60 (from 57 analysts). Our estimate is 29% 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