MTB
M&T Bank Corporation
$219.17
Banks, Insurers & Asset Managers
85%
P/Tangible Book × ROE Quality
Strong
·
Conviction
Undervalued
Trading 46.7% below fair value
You pay
$219.17
Bear
$266.59
Fair
$411.38
Bull
$498.25
Bear
$266.59
+21.6%
ROTCE 10.4% → 1.87x TBV
Fair
$411.38
+87.7%
ROTCE 13.8% → 2.89x TBV
Bull
$498.25
+127.3%
ROTCE 15.9% → 3.50x TBV
Adjust Assumptions
13.8%
7.4%
Key Value Driver
ROTCE (13.8%) vs. cost of equity (7.4%)
Implied Market Multiple
1.54x
Analyst Consensus (External Reference)
Never blended into the bear/base/bull estimates above.
Average Target (48 analysts)
$261.08
Divergence from AlphaVal
58%
Summary
With ROTCE of 13.8% vs. 7.4% cost of equity, fair P/TBV is 2.89x on $142.47 tangible book, implying $411.38 per share. DDM cross-check: $221.49.
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: $221.49 (46% below our primary estimate). Large gaps suggest the dividend may not fully reflect the company's value.
Wall Street's average price target is $261.08 (from 48 analysts). Our estimate is 58% 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