EFSC
Enterprise Financial Services Corp
$59.84
Banks, Insurers & Asset Managers
85%
P/Tangible Book × ROE Quality
Moderate
·
Conviction
Fair Value
Trading 23.4% below fair value
You pay
$59.84
Bear
$49.51
Fair
$78.17
Bull
$95.36
Bear
$49.51
-17.3%
ROTCE 9.4% → 1.12x TBV
Fair
$78.17
+30.6%
ROTCE 12.6% → 1.77x TBV
Bull
$95.36
+59.4%
ROTCE 14.5% → 2.16x TBV
Adjust Assumptions
12.6%
8.9%
Key Value Driver
ROTCE (12.6%) vs. cost of equity (8.9%)
Implied Market Multiple
1.35x
Analyst Consensus (External Reference)
Never blended into the bear/base/bull estimates above.
Average Target (9 analysts)
$70.00
Divergence from AlphaVal
12%
Summary
With ROTCE of 12.6% vs. 8.9% cost of equity, fair P/TBV is 1.77x on $44.24 tangible book, implying $78.17 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