FLG
Flagstar Financial, Inc.
$14.69
Banks, Insurers & Asset Managers
85%
P/Tangible Book × ROE Quality
Strong
·
Conviction
Undervalued
Trading 62.0% below fair value
You pay
$14.69
Bear
$27.06
Fair
$38.66
Bull
$50.25
Bear
$27.06
+84.3%
ROTCE 4.0% → 0.30x TBV
Fair
$38.66
+163.2%
ROTCE -2.3% → 0.30x TBV
Bull
$50.25
+242.2%
ROTCE -2.6% → 0.30x TBV
Key Value Driver
ROTCE (-2.3%) vs. cost of equity (9.9%)
Implied Market Multiple
0.79x
Summary
Our base-case estimate uses P/Tangible Book × ROE Quality. We then blend that result with the average analyst price target of $16.93 from 15 analysts, using a 25% weight on analyst consensus. That produces an estimated intrinsic value of $38.66 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.
Return on equity (-2.3%) is below the minimum investors require (9.9%). This means the bank is worth less than the net assets on its books.
Wall Street's average price target is $16.93 (from 15 analysts). Our estimate is 171% 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