KKR
KKR & Co. Inc.
$102.81
Banks, Insurers & Asset Managers
90%
P/Tangible Book × ROE Quality
Mild
·
Conviction
Overvalued
Trading 5.5% above fair value
You pay
$102.81
Bear
$68.22
Fair
$97.47
Bull
$126.71
Bear
$68.22
-33.6%
ROTCE 8.0% → 0.40x TBV
Fair
$97.47
-5.2%
ROTCE 10.7% → 0.67x TBV
Bull
$126.71
+23.2%
ROTCE 12.3% → 0.83x TBV
Key Value Driver
ROTCE (10.7%) vs. cost of equity (14.0%)
Implied Market Multiple
4.17x
Summary
Our base-case estimate uses P/Tangible Book × ROE Quality. We then blend that result with the average analyst price target of $127.00 from 27 analysts, using a 25% weight on analyst consensus. That produces an estimated intrinsic value of $97.47 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 (10.7%) is below the minimum investors require (14.0%). This means the bank is worth less than the net assets on its books.
Dividend-based valuation: $8.70 (90% below our primary estimate). Large gaps suggest the dividend may not fully reflect the company's value.
Wall Street's average price target is $127.00 (from 27 analysts). Our estimate is 31% below 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