FSK
FS KKR Capital Corp.
$10.14
Banks, Insurers & Asset Managers
85%
P/Tangible Book × ROE Quality
Strong
·
Conviction
Undervalued
Trading 75.7% below fair value
You pay
$10.14
Bear
$29.26
Fair
$41.80
Bull
$54.34
Bear
$29.26
+188.6%
ROTCE 4.0% → 0.30x TBV
Fair
$41.80
+312.2%
ROTCE 0.2% → 0.30x TBV
Bull
$54.34
+435.9%
ROTCE 0.2% → 0.30x TBV
Adjust Assumptions
0.2%
9.4%
Key Value Driver
ROTCE (0.2%) vs. cost of equity (9.4%)
Implied Market Multiple
0.49x
Analyst Consensus (External Reference)
Never blended into the bear/base/bull estimates above.
Average Target (13 analysts)
$11.75
Divergence from AlphaVal
256%
Summary
With ROTCE of 0.2% vs. 9.4% cost of equity, fair P/TBV is 0.30x on $20.88 tangible book, implying $41.80 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 (0.2%) is below the minimum investors require (9.4%). This means the bank is worth less than the net assets on its books.
Wall Street's average price target is $11.75 (from 13 analysts). Our estimate is 256% 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