MUFG
Mitsubishi UFJ Financial Group, Inc.
$22.43
Banks, Insurers & Asset Managers
90%
P/Tangible Book × ROE Quality
Strong
·
Conviction
Undervalued
Trading 49.2% below fair value
You pay
$22.43
Bear
$29.90
Fair
$44.17
Bull
$44.17
Bear
$29.90
+33.3%
ROTCE 9.5% → 2.71x TBV
Fair
$44.17
+96.9%
ROTCE 12.6% → 4.00x TBV
Bull
$44.17
+96.9%
ROTCE 14.5% → 4.00x TBV
Key Value Driver
ROTCE (12.6%) vs. cost of equity (6.0%)
Implied Market Multiple
2.03x
Summary
With ROTCE of 12.6% vs. 6.0% cost of equity, fair P/TBV is 4.00x on $11.04 tangible book, implying $44.17 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 0.0061 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