KMPR
Kemper Corporation
$28.12
Banks, Insurers & Asset Managers
85%
P/Tangible Book × ROE Quality
Strong
·
Conviction
Undervalued
Trading 63.9% below fair value
You pay
$28.12
Bear
$54.54
Fair
$77.90
Bull
$101.27
Bear
$54.54
+93.9%
ROTCE 13.9% → 1.65x TBV
Fair
$77.90
+177.0%
ROTCE 18.5% → 2.43x TBV
Bull
$101.27
+260.1%
ROTCE 21.3% → 2.89x TBV
Key Value Driver
ROTCE (18.5%) vs. cost of equity (10.0%)
Implied Market Multiple
2.14x
Summary
Our base-case estimate uses P/Tangible Book × ROE Quality. We then blend that result with the average analyst price target of $36.00 from 12 analysts, using a 20% weight on analyst consensus. That produces an estimated intrinsic value of $77.90 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.
Dividend-based valuation: $13.79 (84% below our primary estimate). Large gaps suggest the dividend may not fully reflect the company's value.
Wall Street's average price target is $36.00 (from 12 analysts). Our estimate is 145% 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