FISI
Financial Institutions, Inc.
$39.63
Banks, Insurers & Asset Managers
85%
P/Tangible Book × ROE Quality
Strong
·
Conviction
Undervalued
Trading 43.0% below fair value
You pay
$39.63
Bear
$44.56
Fair
$69.52
Bull
$84.49
Bear
$44.56
+12.4%
ROTCE 9.9% → 1.54x TBV
Fair
$69.52
+75.4%
ROTCE 13.2% → 2.41x TBV
Bull
$84.49
+113.2%
ROTCE 15.1% → 2.93x TBV
Adjust Assumptions
13.2%
7.8%
Key Value Driver
ROTCE (13.2%) vs. cost of equity (7.8%)
Implied Market Multiple
1.37x
Analyst Consensus (External Reference)
Never blended into the bear/base/bull estimates above.
Average Target (6 analysts)
$45.00
Divergence from AlphaVal
54%
Summary
With ROTCE of 13.2% vs. 7.8% cost of equity, fair P/TBV is 2.41x on $28.88 tangible book, implying $69.52 per share. DDM cross-check: $23.07.
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: $23.07 (67% below our primary estimate). Large gaps suggest the dividend may not fully reflect the company's value.
Wall Street's average price target is $45.00 (from 6 analysts). Our estimate is 54% 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