FDS
FactSet Research Systems Inc.
$319.91
Banks, Insurers & Asset Managers
80%
P/Tangible Book × ROE Quality
Moderate
·
Conviction
Overvalued
Trading 27.8% above fair value
You pay
$319.91
Bear
$199.39
Fair
$250.38
Bull
$325.49
Bear
$199.39
-37.7%
ROTCE 20.0% → 3.54x TBV
Fair
$250.38
-21.7%
ROTCE 25.0% → 4.00x TBV
Bull
$325.49
+1.7%
ROTCE 30.0% → 4.00x TBV
Adjust Assumptions
26.6%
8.5%
Key Value Driver
ROTCE (26.6%) vs. cost of equity (8.5%)
Implied Market Multiple
5.68x
Analyst Consensus (External Reference)
Never blended into the bear/base/bull estimates above.
Average Target (30 analysts)
$256.75
Divergence from AlphaVal
2%
Summary
With ROTCE of 26.6% vs. 8.5% cost of equity, fair P/TBV is 4.00x on $56.29 tangible book, implying $250.38 per share. DDM cross-check: $172.10.
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.
Dividend-based valuation: $172.10 (31% below our primary estimate). Large gaps suggest the dividend may not fully reflect the company's value.
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