MTB
M&T Bank Corporation
$251.50
Banks, Insurers & Asset Managers
85%
P/Tangible Book × ROE Quality
Moderate
·
Conviction
Undervalued
Trading 37.9% below fair value
You pay
$251.50
Bear
$262.34
Fair
$404.82
Bull
$490.31
Bear
$262.34
+4.3%
ROTCE 10.4% → 1.84x TBV
Fair
$404.82
+61.0%
ROTCE 13.8% → 2.84x TBV
Bull
$490.31
+95.0%
ROTCE 15.9% → 3.44x TBV
Adjust Assumptions
13.8%
7.5%
Key Value Driver
ROTCE (13.8%) vs. cost of equity (7.5%)
Implied Market Multiple
1.77x
Analyst Consensus (External Reference)
Never blended into the bear/base/bull estimates above.
Average Target (48 analysts)
$259.17
Divergence from AlphaVal
56%
Summary
With ROTCE of 13.8% vs. 7.5% cost of equity, fair P/TBV is 2.84x on $142.47 tangible book, implying $404.82 per share. DDM cross-check: $257.54.
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: $257.54 (36% below our primary estimate). Large gaps suggest the dividend may not fully reflect the company's value.
Wall Street's average price target is $259.17 (from 48 analysts). Our estimate is 56% 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