FIBK
First Interstate BancSystem, Inc.
$35.49
Banks, Insurers & Asset Managers
85%
P/Tangible Book × ROE Quality
Moderate
·
Conviction
Fair Value
Trading 23.4% below fair value
You pay
$35.49
Bear
$29.70
Fair
$46.33
Bull
$56.32
Bear
$29.70
-16.3%
ROTCE 9.9% → 1.33x TBV
Fair
$46.33
+30.6%
ROTCE 13.2% → 2.08x TBV
Bull
$56.32
+58.7%
ROTCE 15.2% → 2.52x TBV
Key Value Driver
ROTCE (13.2%) vs. cost of equity (8.4%)
Implied Market Multiple
1.5x
Summary
Our base-case estimate uses P/Tangible Book × ROE Quality. We then blend that result with the average analyst price target of $38.33 from 15 analysts, using a 25% weight on analyst consensus. That produces an estimated intrinsic value of $46.33 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: $34.19 (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 $38.33 (from 15 analysts). Our estimate is 28% 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