CPF
Central Pacific Financial Corp.
$38.35
Banks, Insurers & Asset Managers
85%
P/Tangible Book × ROE Quality
Mild
·
Conviction
Fair Value
Trading 3.4% below fair value
You pay
$38.35
Bear
$25.49
Fair
$39.70
Bull
$48.23
Bear
$25.49
-33.5%
ROTCE 10.0% → 1.22x TBV
Fair
$39.70
+3.5%
ROTCE 13.3% → 1.91x TBV
Bull
$48.23
+25.8%
ROTCE 15.3% → 2.31x TBV
Key Value Driver
ROTCE (13.3%) vs. cost of equity (8.9%)
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 $28.00 from 8 analysts, using a 20% weight on analyst consensus. That produces an estimated intrinsic value of $39.70 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.
Dividend-based valuation: $17.53 (59% below our primary estimate). Large gaps suggest the dividend may not fully reflect the company's value.
Wall Street's average price target is $28.00 (from 8 analysts). Our estimate is 52% 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