FITB
Fifth Third Bancorp
$50.22
Banks, Insurers & Asset Managers
85%
P/Tangible Book × ROE Quality
Mild
·
Conviction
Fair Value
Trading 11.8% below fair value
You pay
$50.22
Bear
$39.87
Fair
$56.95
Bull
$74.04
Bear
$39.87
-20.6%
ROTCE 11.3% → 1.28x TBV
Fair
$56.95
+13.4%
ROTCE 15.1% → 1.94x TBV
Bull
$74.04
+47.4%
ROTCE 17.4% → 2.34x TBV
Adjust Assumptions
15.1%
9.7%
Key Value Driver
ROTCE (15.1%) vs. cost of equity (9.7%)
Implied Market Multiple
2.73x
Analyst Consensus (External Reference)
Never blended into the bear/base/bull estimates above.
Average Target (51 analysts)
$62.63
Divergence from AlphaVal
9%
Summary
With ROTCE of 15.1% vs. 9.7% cost of equity, fair P/TBV is 1.94x on $18.42 tangible book, implying $56.95 per share. DDM cross-check: $42.16.
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: $42.16 (26% below our primary estimate). Large gaps suggest the dividend may not fully reflect the company's value.
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