FIBK
First Interstate BancSystem, Inc.
$34.52
Banks, Insurers & Asset Managers
85%
P/Tangible Book × ROE Quality
Moderate
·
Conviction
Undervalued
Trading 33.4% below fair value
You pay
$34.52
Bear
$33.23
Fair
$51.84
Bull
$63.01
Bear
$33.23
-3.7%
ROTCE 9.9% → 1.41x TBV
Fair
$51.84
+50.2%
ROTCE 13.2% → 2.20x TBV
Bull
$63.01
+82.5%
ROTCE 15.2% → 2.67x TBV
Adjust Assumptions
13.2%
8.2%
Key Value Driver
ROTCE (13.2%) vs. cost of equity (8.2%)
Implied Market Multiple
1.46x
Analyst Consensus (External Reference)
Never blended into the bear/base/bull estimates above.
Average Target (15 analysts)
$35.75
Divergence from AlphaVal
45%
Summary
With ROTCE of 13.2% vs. 8.2% cost of equity, fair P/TBV is 2.20x on $23.60 tangible book, implying $51.84 per share. DDM cross-check: $35.72.
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: $35.72 (31% below our primary estimate). Large gaps suggest the dividend may not fully reflect the company's value.
Wall Street's average price target is $35.75 (from 15 analysts). Our estimate is 45% 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