EFSC
Enterprise Financial Services Corp
$63.64
Banks, Insurers & Asset Managers
85%
P/Tangible Book × ROE Quality
Moderate
·
Conviction
Fair Value
Trading 20.5% below fair value
You pay
$63.64
Bear
$50.72
Fair
$80.07
Bull
$97.69
Bear
$50.72
-20.3%
ROTCE 9.4% → 1.15x TBV
Fair
$80.07
+25.8%
ROTCE 12.6% → 1.81x TBV
Bull
$97.69
+53.5%
ROTCE 14.5% → 2.21x TBV
Adjust Assumptions
12.6%
8.7%
Key Value Driver
ROTCE (12.6%) vs. cost of equity (8.7%)
Implied Market Multiple
1.44x
Analyst Consensus (External Reference)
Never blended into the bear/base/bull estimates above.
Average Target (9 analysts)
$70.00
Divergence from AlphaVal
14%
Summary
With ROTCE of 12.6% vs. 8.7% cost of equity, fair P/TBV is 1.81x on $44.24 tangible book, implying $80.07 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.
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