MKL
Markel Corporation
$1,871.94
Banks, Insurers & Asset Managers
85%
P/Tangible Book × ROE Quality
Strong
·
Conviction
Undervalued
Trading 43.6% below fair value
You pay
$1,871.94
Bear
$2,206.48
Fair
$3,316.23
Bull
$3,982.08
Bear
$2,206.48
+17.9%
ROTCE 11.9% → 2.05x TBV
Fair
$3,316.23
+77.2%
ROTCE 15.8% → 3.08x TBV
Bull
$3,982.08
+112.7%
ROTCE 18.2% → 3.70x TBV
Adjust Assumptions
15.8%
7.8%
Key Value Driver
ROTCE (15.8%) vs. cost of equity (7.8%)
Implied Market Multiple
1.74x
Analyst Consensus (External Reference)
Never blended into the bear/base/bull estimates above.
Average Target (15 analysts)
$1950.00
Divergence from AlphaVal
70%
Summary
With ROTCE of 15.8% vs. 7.8% cost of equity, fair P/TBV is 3.08x on $1075.31 tangible book, implying $3316.23 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.
Wall Street's average price target is $1950.00 (from 15 analysts). Our estimate is 70% 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