LAZ
Lazard Ltd
$48.06
Banks, Insurers & Asset Managers
90%
P/Tangible Book × ROE Quality
Moderate
·
Conviction
Undervalued
Trading 25.8% below fair value
You pay
$48.06
Bear
$45.34
Fair
$64.78
Bull
$84.21
Bear
$45.34
-5.7%
ROTCE 20.0% → 1.96x TBV
Fair
$64.78
+34.8%
ROTCE 25.0% → 4.00x TBV
Bull
$84.21
+75.2%
ROTCE 30.0% → 3.19x TBV
Key Value Driver
ROTCE (49.5%) vs. cost of equity (12.1%)
Implied Market Multiple
9.89x
Summary
Our base-case estimate uses P/Tangible Book × ROE Quality. We then blend that result with the average analyst price target of $48.50 from 29 analysts, using a 25% weight on analyst consensus. That produces an estimated intrinsic value of $64.78 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: $18.57 (74% below our primary estimate). Large gaps suggest the dividend may not fully reflect the company's value.
Wall Street's average price target is $48.50 (from 29 analysts). Our estimate is 45% 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