ITUB
Itaú Unibanco Holding S.A.
$10.15
Banks, Insurers & Asset Managers
90%
P/Tangible Book × ROE Quality
Moderate
·
Conviction
Fair Value
Trading 24.9% below fair value
You pay
$10.15
Bear
$13.15
Fair
$13.51
Bull
$17.57
Bear
$13.15
+29.6%
ROTCE 18.7% → 4.00x TBV
Fair
$13.51
+33.1%
ROTCE 24.9% → 4.00x TBV
Bull
$17.57
+73.1%
ROTCE 28.6% → 4.00x TBV
Adjust Assumptions
24.9%
6.0%
Key Value Driver
ROTCE (24.9%) vs. cost of equity (6.0%)
Implied Market Multiple
3.09x
Analyst Consensus (External Reference)
Never blended into the bear/base/bull estimates above.
Average Target (13 analysts)
$6.38
Divergence from AlphaVal
112%
Summary
With ROTCE of 24.9% vs. 6.0% cost of equity, fair P/TBV is 4.00x on $3.29 tangible book, implying $13.51 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 $6.38 (from 13 analysts). Our estimate is 112% above the consensus -- consider that gap carefully.
Financial statements were converted from BRL into USD using USDBRL at 0.2010 USD per BRL.
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