FHB
First Hawaiian, Inc.
$27.35
Banks, Insurers & Asset Managers
85%
P/Tangible Book × ROE Quality
Moderate
·
Conviction
Fair Value
Trading 24.1% below fair value
You pay
$27.35
Bear
$23.93
Fair
$36.04
Bull
$43.31
Bear
$23.93
-12.5%
ROTCE 11.7% → 1.77x TBV
Fair
$36.04
+31.8%
ROTCE 15.6% → 2.67x TBV
Bull
$43.31
+58.4%
ROTCE 18.0% → 3.21x TBV
Key Value Driver
ROTCE (15.6%) vs. cost of equity (8.4%)
Implied Market Multiple
1.88x
Summary
Our base-case estimate uses P/Tangible Book × ROE Quality. We then blend that result with the average analyst price target of $27.75 from 17 analysts, using a 25% weight on analyst consensus. That produces an estimated intrinsic value of $36.04 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 $27.75 (from 17 analysts). Our estimate is 40% 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