CTBI
Community Trust Bancorp, Inc.
$70.52
Banks, Insurers & Asset Managers
85%
P/Tangible Book × ROE Quality
Moderate
·
Conviction
Undervalued
Trading 34.4% below fair value
You pay
$70.52
Bear
$67.82
Fair
$107.49
Bull
$131.28
Bear
$67.82
-3.8%
ROTCE 9.3% → 1.56x TBV
Fair
$107.49
+52.4%
ROTCE 12.4% → 2.47x TBV
Bull
$131.28
+86.2%
ROTCE 14.3% → 3.02x TBV
Adjust Assumptions
12.4%
7.4%
Key Value Driver
ROTCE (12.4%) vs. cost of equity (7.4%)
Implied Market Multiple
1.62x
Analyst Consensus (External Reference)
Never blended into the bear/base/bull estimates above.
Average Target (6 analysts)
$81.50
Divergence from AlphaVal
32%
Summary
With ROTCE of 12.4% vs. 7.4% cost of equity, fair P/TBV is 2.47x on $43.52 tangible book, implying $107.49 per share. DDM cross-check: $609.57.
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: $609.57 (467% above our primary estimate). Large gaps suggest the dividend may not fully reflect the company's value.
Wall Street's average price target is $81.50 (from 6 analysts). Our estimate is 32% 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