JPM
JPMorgan Chase & Co.
$354.71
Banks, Insurers & Asset Managers
90%
P/Tangible Book × ROE Quality
Moderate
·
Conviction
Overvalued
Trading 19.3% above fair value
You pay
$354.71
Bear
$203.44
Fair
$297.43
Bull
$353.83
Bear
$203.44
-42.6%
ROTCE 14.4% → 1.83x TBV
Fair
$297.43
-16.1%
ROTCE 19.1% → 2.67x TBV
Bull
$353.83
-0.2%
ROTCE 22.0% → 3.18x TBV
Adjust Assumptions
19.1%
9.7%
Key Value Driver
ROTCE (19.1%) vs. cost of equity (9.7%)
Implied Market Multiple
3.19x
Analyst Consensus (External Reference)
Never blended into the bear/base/bull estimates above.
Average Target (61 analysts)
$373.64
Divergence from AlphaVal
20%
Summary
With ROTCE of 19.1% vs. 9.7% cost of equity, fair P/TBV is 2.67x on $111.21 tangible book, implying $297.43 per share. DDM cross-check: $535.40.
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.
Dividend-based valuation: $535.40 (80% above 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