FCNCA
First Citizens BancShares, Inc.
$2,363.86
Banks, Insurers & Asset Managers
90%
P/Tangible Book × ROE Quality
Moderate
·
Conviction
Undervalued
Trading 31.4% below fair value
You pay
$2,363.86
Bear
$2,025.26
Fair
$3,445.16
Bull
$4,297.11
Bear
$2,025.26
-14.3%
ROTCE 7.6% → 1.04x TBV
Fair
$3,445.16
+45.7%
ROTCE 10.2% → 1.76x TBV
Bull
$4,297.11
+81.8%
ROTCE 11.7% → 2.20x TBV
Adjust Assumptions
10.2%
7.5%
Key Value Driver
ROTCE (10.2%) vs. cost of equity (7.5%)
Implied Market Multiple
1.21x
Analyst Consensus (External Reference)
Never blended into the bear/base/bull estimates above.
Average Target (11 analysts)
$2448.00
Divergence from AlphaVal
41%
Summary
With ROTCE of 10.2% vs. 7.5% cost of equity, fair P/TBV is 1.76x on $1952.65 tangible book, implying $3445.16 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 $2448.00 (from 11 analysts). Our estimate is 41% 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