KKR
KKR & Co. Inc.
$97.21
Banks, Insurers & Asset Managers
90%
P/Tangible Book × ROE Quality
Mild
·
Conviction
Overvalued
Trading 12.5% above fair value
You pay
$97.21
Bear
$60.50
Fair
$86.42
Bull
$112.35
Bear
$60.50
-37.8%
ROTCE 8.0% → 0.40x TBV
Fair
$86.42
-11.1%
ROTCE 10.7% → 0.67x TBV
Bull
$112.35
+15.6%
ROTCE 12.3% → 0.83x TBV
Adjust Assumptions
10.7%
14.0%
Key Value Driver
ROTCE (10.7%) vs. cost of equity (14.0%)
Implied Market Multiple
3.95x
Analyst Consensus (External Reference)
Never blended into the bear/base/bull estimates above.
Average Target (27 analysts)
$126.78
Divergence from AlphaVal
32%
Summary
With ROTCE of 10.7% vs. 14.0% cost of equity, fair P/TBV is 0.67x on $24.64 tangible book, implying $86.42 per share. DDM cross-check: $8.70.
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 $126.78 (from 27 analysts). Our estimate is 32% 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