MUFG
Mitsubishi UFJ Financial Group, Inc.
$23.86
Banks, Insurers & Asset Managers
90%
P/Tangible Book × ROE Quality
Strong
·
Conviction
Undervalued
Trading 47.0% below fair value
You pay
$23.86
Bear
$28.09
Fair
$45.07
Bull
$47.16
Bear
$28.09
+17.7%
ROTCE 8.9% → 2.38x TBV
Fair
$45.07
+88.8%
ROTCE 11.9% → 3.82x TBV
Bull
$47.16
+97.6%
ROTCE 13.7% → 4.00x TBV
Adjust Assumptions
11.9%
6.1%
Key Value Driver
ROTCE (11.9%) vs. cost of equity (6.1%)
Implied Market Multiple
2.02x
Summary
With ROTCE of 11.9% vs. 6.1% cost of equity, fair P/TBV is 3.82x on $11.79 tangible book, implying $45.07 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.
Financial statements were converted from JPY into USD using USDJPY at 0.0065 USD per JPY.
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