MKL
Markel Corporation
$1,972.43
Banks, Insurers & Asset Managers
85%
P/Tangible Book × ROE Quality
Moderate
·
Conviction
Undervalued
Trading 31.8% below fair value
You pay
$1,972.43
Bear
$1,923.83
Fair
$2,891.41
Bull
$3,471.97
Bear
$1,923.83
-2.5%
ROTCE 11.9% → 2.00x TBV
Fair
$2,891.41
+46.6%
ROTCE 15.8% → 3.01x TBV
Bull
$3,471.97
+76.0%
ROTCE 18.2% → 3.61x TBV
Key Value Driver
ROTCE (15.8%) vs. cost of equity (7.9%)
Implied Market Multiple
1.85x
Summary
Our base-case estimate uses P/Tangible Book × ROE Quality. We then blend that result with the average analyst price target of $1950.00 from 15 analysts, using a 25% weight on analyst consensus. That produces an estimated intrinsic value of $2891.41 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 64% 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