GGAL
Grupo Financiero Galicia S.A.
$36.79
Banks, Insurers & Asset Managers
85%
P/Tangible Book × ROE Quality
Strong
·
Conviction
Overvalued
Trading 169.1% above fair value
You pay
$36.79
Bear
$9.57
Fair
$13.67
Bull
$17.78
Bear
$9.57
-74.0%
ROTCE 4.0% → 0.30x TBV
Fair
$13.67
-62.8%
ROTCE 2.9% → 0.30x TBV
Bull
$17.78
-51.7%
ROTCE 3.3% → 0.30x TBV
Adjust Assumptions
2.9%
6.3%
Key Value Driver
ROTCE (2.9%) vs. cost of equity (6.3%)
Implied Market Multiple
1.21x
Analyst Consensus (External Reference)
Never blended into the bear/base/bull estimates above.
Average Target (12 analysts)
$60.50
Divergence from AlphaVal
77%
Summary
With ROTCE of 2.9% vs. 6.3% cost of equity, fair P/TBV is 0.30x on $30.37 tangible book, implying $13.67 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 (2.9%) is below the minimum investors require (6.3%). This means the bank is worth less than the net assets on its books.
Wall Street's average price target is $60.50 (from 12 analysts). Our estimate is 77% below the consensus -- consider that gap carefully.
Financial statements were converted from ARS into USD using USDARS at 0.0007 USD per ARS.
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