CPF
Central Pacific Financial Corp.
$37.56
Banks, Insurers & Asset Managers
85%
P/Tangible Book × ROE Quality
Mild
·
Conviction
Fair Value
Trading 11.3% below fair value
You pay
$37.56
Bear
$27.18
Fair
$42.34
Bull
$51.43
Bear
$27.18
-27.6%
ROTCE 10.0% → 1.22x TBV
Fair
$42.34
+12.7%
ROTCE 13.3% → 1.89x TBV
Bull
$51.43
+36.9%
ROTCE 15.3% → 2.30x TBV
Adjust Assumptions
13.3%
8.9%
Key Value Driver
ROTCE (13.3%) vs. cost of equity (8.9%)
Implied Market Multiple
1.68x
Analyst Consensus (External Reference)
Never blended into the bear/base/bull estimates above.
Average Target (9 analysts)
$28.00
Divergence from AlphaVal
51%
Summary
With ROTCE of 13.3% vs. 8.9% cost of equity, fair P/TBV is 1.89x on $22.37 tangible book, implying $42.34 per share. DDM cross-check: $18.30.
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: $18.30 (57% 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 9 analysts). Our estimate is 51% 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