L
Loews Corporation
$108.87
Banks, Insurers & Asset Managers
85%
P/Tangible Book × ROE Quality
Moderate
·
Conviction
Fair Value
Trading 21.7% below fair value
You pay
$108.87
Bear
$79.46
Fair
$138.99
Bull
$174.71
Bear
$79.46
-27.0%
ROTCE 7.2% → 0.94x TBV
Fair
$138.99
+27.7%
ROTCE 9.6% → 1.65x TBV
Bull
$174.71
+60.5%
ROTCE 11.0% → 2.07x TBV
Key Value Driver
ROTCE (9.6%) vs. cost of equity (7.4%)
Implied Market Multiple
1.29x
Summary
With ROTCE of 9.6% vs. 7.4% cost of equity, fair P/TBV is 1.65x on $84.32 tangible book, implying $138.99 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.
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