LAZ
Lazard Inc
$37.70
Banks, Insurers & Asset Managers
90%
P/Tangible Book × ROE Quality
Moderate
·
Conviction
Undervalued
Trading 34.3% below fair value
You pay
$37.70
Bear
$40.15
Fair
$57.36
Bull
$74.57
Bear
$40.15
+6.5%
ROTCE 20.0% → 1.92x TBV
Fair
$57.36
+52.1%
ROTCE 25.0% → 2.52x TBV
Bull
$74.57
+97.8%
ROTCE 30.0% → 3.12x TBV
Adjust Assumptions
49.5%
12.3%
Key Value Driver
ROTCE (49.5%) vs. cost of equity (12.3%)
Implied Market Multiple
7.68x
Analyst Consensus (External Reference)
Never blended into the bear/base/bull estimates above.
Average Target (29 analysts)
$41.20
Divergence from AlphaVal
39%
Summary
With ROTCE of 49.5% vs. 12.3% cost of equity, fair P/TBV is 2.52x on $4.91 tangible book, implying $57.36 per share. DDM cross-check: $17.18.
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: $17.18 (70% below our primary estimate). Large gaps suggest the dividend may not fully reflect the company's value.
Wall Street's average price target is $41.20 (from 29 analysts). Our estimate is 39% 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