CPF
Central Pacific Financial Corp.
$36.48
Banks, Insurers & Asset Managers
85%
P/Tangible Book × ROE Quality
Mild
·
Conviction
Fair Value
Trading 13.2% below fair value
You pay
$36.48
Bear
$26.98
Fair
$42.02
Bull
$51.04
Bear
$26.98
-26.0%
ROTCE 10.0% → 1.19x TBV
Fair
$42.02
+15.2%
ROTCE 13.3% → 1.85x TBV
Bull
$51.04
+39.9%
ROTCE 15.3% → 2.25x TBV
Adjust Assumptions
13.3%
9.0%
Key Value Driver
ROTCE (13.3%) vs. cost of equity (9.0%)
Implied Market Multiple
1.61x
Analyst Consensus (External Reference)
Never blended into the bear/base/bull estimates above.
Average Target (9 analysts)
$38.00
Divergence from AlphaVal
11%
Summary
With ROTCE of 13.3% vs. 9.0% cost of equity, fair P/TBV is 1.85x on $22.68 tangible book, implying $42.02 per share. DDM cross-check: $18.01.
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: $18.01 (57% below our primary estimate). Large gaps suggest the dividend may not fully reflect the company's value.
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