MC
Moelis & Company
$65.76
Banks, Insurers & Asset Managers
85%
P/Tangible Book × ROE Quality
Mild
·
Conviction
Fair Value
Trading 13.1% below fair value
You pay
$65.76
Bear
$52.98
Fair
$75.68
Bull
$98.38
Bear
$52.98
-19.4%
ROTCE 20.0% → 1.60x TBV
Fair
$75.68
+15.1%
ROTCE 25.0% → 3.71x TBV
Bull
$98.38
+49.6%
ROTCE 30.0% → 2.60x TBV
Key Value Driver
ROTCE (41.1%) vs. cost of equity (14.0%)
Implied Market Multiple
8.62x
Summary
Our base-case estimate uses P/Tangible Book × ROE Quality. We then blend that result with the average analyst price target of $73.40 from 22 analysts, using a 25% weight on analyst consensus. That produces an estimated intrinsic value of $75.68 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