MC
Moelis & Company
$57.02
Banks, Insurers & Asset Managers
85%
P/Tangible Book × ROE Quality
Mild
·
Conviction
Fair Value
Trading 6.3% below fair value
You pay
$57.02
Bear
$42.59
Fair
$60.84
Bull
$79.09
Bear
$42.59
-25.3%
ROTCE 20.0% → 1.60x TBV
Fair
$60.84
+6.7%
ROTCE 25.0% → 2.10x TBV
Bull
$79.09
+38.7%
ROTCE 30.0% → 2.60x TBV
Adjust Assumptions
41.1%
14.0%
Key Value Driver
ROTCE (41.1%) vs. cost of equity (14.0%)
Implied Market Multiple
7.44x
Analyst Consensus (External Reference)
Never blended into the bear/base/bull estimates above.
Average Target (22 analysts)
$66.60
Divergence from AlphaVal
9%
Summary
With ROTCE of 41.1% vs. 14.0% cost of equity, fair P/TBV is 2.10x on $7.66 tangible book, implying $60.84 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