GPN
Global Payments Inc.
$73.26
Banks, Insurers & Asset Managers
80%
P/Tangible Book × ROE Quality
Mild
·
Conviction
Fair Value
Trading 12.4% below fair value
You pay
$73.26
Bear
$58.54
Fair
$83.62
Bull
$108.71
Bear
$58.54
-20.1%
ROTCE 20.0% → 3.58x TBV
Fair
$83.62
+14.1%
ROTCE 25.0% → 4.00x TBV
Bull
$108.71
+48.4%
ROTCE 30.0% → 4.00x TBV
Key Value Driver
ROTCE (88.6%) vs. cost of equity (8.5%)
Implied Market Multiple
10.97x
Summary
Our base-case estimate uses P/Tangible Book × ROE Quality. We then blend that result with the average analyst price target of $84.89 from 62 analysts, using a 35% weight on analyst consensus. That produces an estimated intrinsic value of $83.62 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.
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