MUFG
Mitsubishi UFJ Financial Group, Inc.
$21.09
Banks, Insurers & Asset Managers
90%
P/Tangible Book × ROE Quality
Strong
·
Conviction
Undervalued
Trading 51.9% below fair value
You pay
$21.09
Bear
$27.35
Fair
$43.88
Bull
$45.92
Bear
$27.35
+29.7%
ROTCE 8.9% → 2.38x TBV
Fair
$43.88
+108.1%
ROTCE 11.9% → 3.82x TBV
Bull
$45.92
+117.7%
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
1.84x
Summary
With ROTCE of 11.9% vs. 6.1% cost of equity, fair P/TBV is 3.82x on $11.48 tangible book, implying $43.88 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 0.0063 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