FBP
First BanCorp.
$24.11
Banks, Insurers & Asset Managers
85%
P/Tangible Book × ROE Quality
Moderate
·
Conviction
Undervalued
Trading 26.4% below fair value
You pay
$24.11
Bear
$22.23
Fair
$32.78
Bull
$39.11
Bear
$22.23
-7.8%
ROTCE 13.4% → 1.92x TBV
Fair
$32.78
+35.9%
ROTCE 17.9% → 2.83x TBV
Bull
$39.11
+62.2%
ROTCE 20.6% → 3.37x TBV
Key Value Driver
ROTCE (17.9%) vs. cost of equity (8.9%)
Implied Market Multiple
1.94x
Summary
Our base-case estimate uses P/Tangible Book × ROE Quality. We then blend that result with the average analyst price target of $25.50 from 16 analysts, using a 25% weight on analyst consensus. That produces an estimated intrinsic value of $32.78 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 $25.50 (from 16 analysts). Our estimate is 38% 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