JRVR
James River Group Holdings, Ltd.
$4.00
Banks, Insurers & Asset Managers
85%
P/Tangible Book × ROE Quality
Strong
·
Conviction
Undervalued
Trading 85.5% below fair value
You pay
$4.00
Bear
$16.79
Fair
$27.54
Bull
$30.89
Bear
$16.79
+319.9%
ROTCE 8.3% → 2.17x TBV
Fair
$27.54
+588.5%
ROTCE 11.1% → 3.57x TBV
Bull
$30.89
+672.3%
ROTCE 12.8% → 4.00x TBV
Key Value Driver
ROTCE (11.1%) vs. cost of equity (6.0%)
Implied Market Multiple
0.43x
Summary
Our base-case estimate uses P/Tangible Book × ROE Quality. We then blend that result with the average analyst price target of $6.25 from 14 analysts, using a 20% weight on analyst consensus. That produces an estimated intrinsic value of $27.54 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 $6.25 (from 14 analysts). Our estimate is 426% above the consensus -- consider that gap carefully.
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