GPN
Global Payments Inc.
$83.80
Banks, Insurers & Asset Managers
80%
P/Tangible Book × ROE Quality
Mild
·
Conviction
Fair Value
Trading 0.8% below fair value
You pay
$83.80
Bear
$59.12
Fair
$84.46
Bull
$109.79
Bear
$59.12
-29.4%
ROTCE 20.0% → 3.53x TBV
Fair
$84.46
+0.8%
ROTCE 25.0% → 4.00x TBV
Bull
$109.79
+31.0%
ROTCE 30.0% → 4.00x TBV
Key Value Driver
ROTCE (88.6%) vs. cost of equity (8.5%)
Implied Market Multiple
13.16x
Summary
Our base-case estimate uses P/Tangible Book × ROE Quality. We then blend that result with the average analyst price target of $87.27 from 62 analysts, using a 35% weight on analyst consensus. That produces an estimated intrinsic value of $84.46 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