GBDC
Golub Capital BDC, Inc.
$12.89
Banks, Insurers & Asset Managers
85%
P/Tangible Book × ROE Quality
Strong
·
Conviction
Undervalued
Trading 60.2% below fair value
You pay
$12.89
Bear
$22.67
Fair
$32.39
Bull
$42.11
Bear
$22.67
+75.8%
ROTCE 7.1% → 1.15x TBV
Fair
$32.39
+151.2%
ROTCE 9.4% → 2.03x TBV
Bull
$42.11
+226.7%
ROTCE 10.9% → 2.55x TBV
Key Value Driver
ROTCE (9.4%) vs. cost of equity (6.7%)
Implied Market Multiple
0.84x
Summary
Our base-case estimate uses P/Tangible Book × ROE Quality. We then blend that result with the average analyst price target of $14.25 from 12 analysts, using a 20% weight on analyst consensus. That produces an estimated intrinsic value of $32.39 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.
Wall Street's average price target is $14.25 (from 12 analysts). Our estimate is 159% 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