FDS
FactSet Research Systems Inc.
$232.00
Banks, Insurers & Asset Managers
80%
P/Tangible Book × ROE Quality
Mild
·
Conviction
Fair Value
Trading 6.9% below fair value
You pay
$232.00
Bear
$243.36
Fair
$249.14
Bull
$249.14
Bear
$243.36
+4.9%
ROTCE 20.0% → 3.91x TBV
Fair
$249.14
+7.4%
ROTCE 25.0% → 4.00x TBV
Bull
$249.14
+7.4%
ROTCE 30.0% → 4.00x TBV
Key Value Driver
ROTCE (27.3%) vs. cost of equity (8.1%)
Implied Market Multiple
3.87x
Summary
Our base-case estimate uses P/Tangible Book × ROE Quality. We then blend that result with the average analyst price target of $276.38 from 28 analysts, using a 25% weight on analyst consensus. That produces an estimated intrinsic value of $249.14 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.
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