MFC
Manulife Financial Corporation
$42.93
Banks, Insurers & Asset Managers
85%
P/Tangible Book × ROE Quality
Mild
·
Conviction
Overvalued
Trading 7.6% above fair value
You pay
$42.93
Bear
$26.27
Fair
$39.88
Bull
$48.05
Bear
$26.27
-38.8%
ROTCE 11.2% → 1.61x TBV
Fair
$39.88
-7.1%
ROTCE 15.0% → 2.45x TBV
Bull
$48.05
+11.9%
ROTCE 17.2% → 2.95x TBV
Adjust Assumptions
15.0%
8.5%
Key Value Driver
ROTCE (15.0%) vs. cost of equity (8.5%)
Implied Market Multiple
2.64x
Analyst Consensus (External Reference)
Never blended into the bear/base/bull estimates above.
Average Target (14 analysts)
$34.24
Divergence from AlphaVal
16%
Summary
With ROTCE of 15.0% vs. 8.5% cost of equity, fair P/TBV is 2.45x on $16.28 tangible book, implying $39.88 per share. DDM cross-check: $57.88.
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: $57.88 (45% above our primary estimate). Large gaps suggest the dividend may not fully reflect the company's value.
Financial statements were converted from CAD into USD using USDCAD at 0.7030 USD per CAD.
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