FDS
FactSet Research Systems Inc.
$301.96
Banks, Insurers & Asset Managers
80%
P/Tangible Book × ROE Quality
Moderate
·
Conviction
Overvalued
Trading 22.8% above fair value
You pay
$301.96
Bear
$233.61
Fair
$245.90
Bull
$245.90
Bear
$233.61
-22.6%
ROTCE 20.0% → 3.80x TBV
Fair
$245.90
-18.6%
ROTCE 25.0% → 4.00x TBV
Bull
$245.90
-18.6%
ROTCE 30.0% → 4.00x TBV
Adjust Assumptions
27.3%
8.2%
Key Value Driver
ROTCE (27.3%) vs. cost of equity (8.2%)
Implied Market Multiple
4.91x
Analyst Consensus (External Reference)
Never blended into the bear/base/bull estimates above.
Average Target (29 analysts)
$251.09
Divergence from AlphaVal
2%
Summary
With ROTCE of 27.3% vs. 8.2% cost of equity, fair P/TBV is 4.00x on $61.48 tangible book, implying $245.90 per share. DDM cross-check: $193.13.
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