IVZ
Invesco Ltd.
$27.05
Banks, Insurers & Asset Managers
85%
P/Tangible Book × ROE Quality
Moderate
·
Conviction
Fair Value
Trading 20.3% below fair value
You pay
$27.05
Bear
$23.76
Fair
$33.95
Bull
$44.14
Bear
$23.76
-12.2%
ROTCE 4.0% → 0.30x TBV
Fair
$33.95
+25.5%
ROTCE -2.3% → 0.30x TBV
Bull
$44.14
+63.2%
ROTCE -2.6% → 0.30x TBV
Key Value Driver
ROTCE (-2.3%) vs. cost of equity (13.0%)
Implied Market Multiple
0.98x
Summary
Our base-case estimate uses P/Tangible Book × ROE Quality. We then blend that result with the average analyst price target of $29.72 from 28 analysts, using a 25% weight on analyst consensus. That produces an estimated intrinsic value of $33.95 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 (-2.3%) is below the minimum investors require (13.0%). This means the bank is worth less than the net assets on its books.
Dividend-based valuation: $9.70 (73% below our primary estimate). Large gaps suggest the dividend may not fully reflect the company's value.
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