COF
Capital One Financial Corporation
$187.79
Banks, Insurers & Asset Managers
80%
P/Tangible Book × ROE Quality
Mild
·
Conviction
Fair Value
Trading 10.6% below fair value
You pay
$187.79
Bear
$147.01
Fair
$210.03
Bull
$273.04
Bear
$147.01
-21.7%
ROTCE 4.0% → 0.30x TBV
Fair
$210.03
+11.8%
ROTCE 3.6% → 0.30x TBV
Bull
$273.04
+45.4%
ROTCE 4.1% → 0.30x TBV
Key Value Driver
ROTCE (3.6%) vs. cost of equity (10.1%)
Implied Market Multiple
1.71x
Summary
Our base-case estimate uses P/Tangible Book × ROE Quality. We then blend that result with the average analyst price target of $267.18 from 56 analysts, using a 35% weight on analyst consensus. That produces an estimated intrinsic value of $210.03 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 (10.1%). This means the bank is worth less than the net assets on its books.
Wall Street's average price target is $267.18 (from 56 analysts). Our estimate is 33% 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