EGBN
Eagle Bancorp, Inc.
$26.19
Banks, Insurers & Asset Managers
85%
P/Tangible Book × ROE Quality
Strong
·
Conviction
Undervalued
Trading 53.1% below fair value
You pay
$26.19
Bear
$39.13
Fair
$55.89
Bull
$72.66
Bear
$39.13
+49.4%
ROTCE 4.0% → 0.30x TBV
Fair
$55.89
+113.4%
ROTCE -11.2% → 0.30x TBV
Bull
$72.66
+177.4%
ROTCE -12.9% → 0.30x TBV
Key Value Driver
ROTCE (-11.2%) vs. cost of equity (9.6%)
Implied Market Multiple
0.7x
Summary
Our base-case estimate uses P/Tangible Book × ROE Quality. We then blend that result with the average analyst price target of $28.67 from 14 analysts, using a 20% weight on analyst consensus. That produces an estimated intrinsic value of $55.89 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.
Return on equity (-11.2%) is below the minimum investors require (9.6%). This means the bank is worth less than the net assets on its books.
Wall Street's average price target is $28.67 (from 14 analysts). Our estimate is 119% 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