FNF
Fidelity National Financial, Inc.
$48.61
Banks, Insurers & Asset Managers
85%
P/Tangible Book × ROE Quality
Moderate
·
Conviction
Undervalued
Trading 26.1% below fair value
You pay
$48.61
Bear
$46.06
Fair
$65.81
Bull
$85.55
Bear
$46.06
-5.2%
ROTCE 6.1% → 0.34x TBV
Fair
$65.81
+35.4%
ROTCE 8.1% → 0.67x TBV
Bull
$85.55
+76.0%
ROTCE 9.3% → 0.87x TBV
Key Value Driver
ROTCE (8.1%) vs. cost of equity (10.1%)
Implied Market Multiple
1.76x
Summary
Our base-case estimate uses P/Tangible Book × ROE Quality. We then blend that result with the average analyst price target of $54.00 from 17 analysts, using a 25% weight on analyst consensus. That produces an estimated intrinsic value of $65.81 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 (8.1%) is below the minimum investors require (10.1%). This means the bank is worth less than the net assets on its books.
Dividend-based valuation: $33.25 (52% below our primary estimate). Large gaps suggest the dividend may not fully reflect the company's value.
Wall Street's average price target is $54.00 (from 17 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