MUFG
Mitsubishi UFJ Financial Group, Inc.
$19.40
Banks, Insurers & Asset Managers
90%
P/Tangible Book × ROE Quality
Strong
·
Conviction
Undervalued
Trading 57.3% below fair value
You pay
$19.40
Bear
$29.73
Fair
$45.47
Bull
$45.47
Bear
$29.73
+53.2%
ROTCE 9.5% → 2.62x TBV
Fair
$45.47
+134.4%
ROTCE 12.6% → 4.00x TBV
Bull
$45.47
+134.4%
ROTCE 14.5% → 4.00x TBV
Key Value Driver
ROTCE (12.6%) vs. cost of equity (6.1%)
Implied Market Multiple
1.71x
Summary
With ROTCE of 12.6% vs. 6.1% cost of equity, fair P/TBV is 4.00x on $11.37 tangible book, implying $45.47 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