MOFG
MidWestOne Financial Group, Inc.
$49.31
Banks, Insurers & Asset Managers
85%
P/Tangible Book × ROE Quality
Moderate
·
Conviction
Overvalued
Trading 19.1% above fair value
You pay
$49.31
Bear
$28.99
Fair
$41.41
Bull
$53.84
Bear
$28.99
-41.2%
ROTCE 4.0% → 0.30x TBV
Fair
$41.41
-16.0%
ROTCE -13.3% → 0.30x TBV
Bull
$53.84
+9.2%
ROTCE -15.3% → 0.30x TBV
Key Value Driver
ROTCE (-13.3%) vs. cost of equity (10.1%)
Implied Market Multiple
2.25x
Summary
Our base-case estimate uses P/Tangible Book × ROE Quality. We then blend that result with the average analyst price target of $31.25 from 8 analysts, using a 20% weight on analyst consensus. That produces an estimated intrinsic value of $41.41 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.
Return on equity (-13.3%) is below the minimum investors require (10.1%). This means the bank is worth less than the net assets on its books.
Dividend-based valuation: $11.05 (75% below our primary estimate). Large gaps suggest the dividend may not fully reflect the company's value.
Wall Street's average price target is $31.25 (from 8 analysts). Our estimate is 41% 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