GS
The Goldman Sachs Group, Inc.
$996.73
Banks, Insurers & Asset Managers
90%
P/Tangible Book × ROE Quality
Mild
·
Conviction
Fair Value
Trading 3.1% below fair value
You pay
$996.73
Bear
$719.88
Fair
$1,028.40
Bull
$1,336.92
Bear
$719.88
-27.8%
ROTCE 10.9% → 0.94x TBV
Fair
$1,028.40
+3.2%
ROTCE 14.5% → 1.44x TBV
Bull
$1,336.92
+34.1%
ROTCE 16.7% → 1.74x TBV
Key Value Driver
ROTCE (14.5%) vs. cost of equity (11.3%)
Implied Market Multiple
2.49x
Summary
Our base-case estimate uses P/Tangible Book × ROE Quality. We then blend that result with the average analyst price target of $980.78 from 55 analysts, using a 35% weight on analyst consensus. That produces an estimated intrinsic value of $1028.40 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