FIBK
First Interstate BancSystem, Inc.
$38.83
Banks, Insurers & Asset Managers
85%
P/Tangible Book × ROE Quality
Moderate
·
Conviction
Fair Value
Trading 17.5% below fair value
You pay
$38.83
Bear
$30.18
Fair
$47.07
Bull
$57.22
Bear
$30.18
-22.3%
ROTCE 9.9% → 1.35x TBV
Fair
$47.07
+21.2%
ROTCE 13.2% → 2.11x TBV
Bull
$57.22
+47.4%
ROTCE 15.2% → 2.57x TBV
Key Value Driver
ROTCE (13.2%) vs. cost of equity (8.3%)
Implied Market Multiple
1.65x
Summary
Our base-case estimate uses P/Tangible Book × ROE Quality. We then blend that result with the average analyst price target of $38.67 from 15 analysts, using a 25% weight on analyst consensus. That produces an estimated intrinsic value of $47.07 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.
Dividend-based valuation: $34.67 (30% below our primary estimate). Large gaps suggest the dividend may not fully reflect the company's value.
Wall Street's average price target is $38.67 (from 15 analysts). Our estimate is 29% 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