MC
Moelis & Company
$66.97
Banks, Insurers & Asset Managers
85%
P/Tangible Book × ROE Quality
Mild
·
Conviction
Fair Value
Trading 12.2% below fair value
You pay
$66.97
Bear
$53.39
Fair
$76.27
Bull
$99.15
Bear
$53.39
-20.3%
ROTCE 20.0% → 1.60x TBV
Fair
$76.27
+13.9%
ROTCE 25.0% → 3.71x TBV
Bull
$99.15
+48.0%
ROTCE 30.0% → 2.60x TBV
Key Value Driver
ROTCE (41.1%) vs. cost of equity (14.0%)
Implied Market Multiple
8.77x
Summary
Our base-case estimate uses P/Tangible Book × ROE Quality. We then blend that result with the average analyst price target of $75.75 from 22 analysts, using a 25% weight on analyst consensus. That produces an estimated intrinsic value of $76.27 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