FBP
First BanCorp.
$27.43
Banks, Insurers & Asset Managers
85%
P/Tangible Book × ROE Quality
Moderate
·
Conviction
Fair Value
Trading 20.3% below fair value
You pay
$27.43
Bear
$23.33
Fair
$34.41
Bull
$41.05
Bear
$23.33
-14.9%
ROTCE 13.4% → 1.98x TBV
Fair
$34.41
+25.4%
ROTCE 17.9% → 2.92x TBV
Bull
$41.05
+49.7%
ROTCE 20.6% → 3.48x TBV
Key Value Driver
ROTCE (17.9%) vs. cost of equity (8.8%)
Implied Market Multiple
2.2x
Summary
Our base-case estimate uses P/Tangible Book × ROE Quality. We then blend that result with the average analyst price target of $28.75 from 16 analysts, using a 25% weight on analyst consensus. That produces an estimated intrinsic value of $34.41 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.
Wall Street's average price target is $28.75 (from 16 analysts). Our estimate is 26% 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