JPM
JPMorgan Chase & Co.
$331.58
Banks, Insurers & Asset Managers
90%
P/Tangible Book × ROE Quality
Mild
·
Conviction
Overvalued
Trading 14.9% above fair value
You pay
$331.58
Bear
$197.40
Fair
$288.61
Bull
$343.33
Bear
$197.40
-40.5%
ROTCE 14.4% → 1.76x TBV
Fair
$288.61
-13.0%
ROTCE 19.1% → 2.57x TBV
Bull
$343.33
+3.5%
ROTCE 22.0% → 3.06x TBV
Adjust Assumptions
19.1%
9.9%
Key Value Driver
ROTCE (19.1%) vs. cost of equity (9.9%)
Implied Market Multiple
2.96x
Analyst Consensus (External Reference)
Never blended into the bear/base/bull estimates above.
Average Target (61 analysts)
$373.36
Divergence from AlphaVal
23%
Summary
With ROTCE of 19.1% vs. 9.9% cost of equity, fair P/TBV is 2.57x on $112.10 tangible book, implying $288.61 per share. DDM cross-check: $746.03.
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: $746.03 (158% 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