LADR
Ladder Capital Corp
$10.13
Banks, Insurers & Asset Managers
90%
P/Tangible Book × ROE Quality
Moderate
·
Conviction
Fair Value
Trading 23.7% below fair value
You pay
$10.13
Bear
$9.30
Fair
$13.29
Bull
$17.27
Bear
$9.30
-8.2%
ROTCE 6.2% → 0.37x TBV
Fair
$13.29
+31.1%
ROTCE 8.2% → 0.72x TBV
Bull
$17.27
+70.4%
ROTCE 9.5% → 0.94x TBV
Key Value Driver
ROTCE (8.2%) vs. cost of equity (9.8%)
Implied Market Multiple
1.66x
Summary
Our base-case estimate uses P/Tangible Book × ROE Quality. We then blend that result with the average analyst price target of $13.00 from 17 analysts, using a 25% weight on analyst consensus. That produces an estimated intrinsic value of $13.29 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 (8.2%) is below the minimum investors require (9.8%). This means the bank is worth less than the net assets on its books.
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