MKL
Markel Corporation
$1,826.72
Banks, Insurers & Asset Managers
85%
P/Tangible Book × ROE Quality
Strong
·
Conviction
Undervalued
Trading 44.3% below fair value
You pay
$1,826.72
Bear
$2,181.43
Fair
$3,278.57
Bull
$3,936.86
Bear
$2,181.43
+19.4%
ROTCE 11.9% → 2.03x TBV
Fair
$3,278.57
+79.5%
ROTCE 15.8% → 3.05x TBV
Bull
$3,936.86
+115.5%
ROTCE 18.2% → 3.66x TBV
Adjust Assumptions
15.8%
7.9%
Key Value Driver
ROTCE (15.8%) vs. cost of equity (7.9%)
Implied Market Multiple
1.7x
Analyst Consensus (External Reference)
Never blended into the bear/base/bull estimates above.
Average Target (15 analysts)
$1950.00
Divergence from AlphaVal
68%
Summary
With ROTCE of 15.8% vs. 7.9% cost of equity, fair P/TBV is 3.05x on $1075.31 tangible book, implying $3278.57 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 68% 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