NWBI
Northwest Bancshares, Inc.
$13.97
Banks, Insurers & Asset Managers
85%
P/Tangible Book × ROE Quality
Mild
·
Conviction
Fair Value
Trading 10.1% below fair value
You pay
$13.97
Bear
$10.87
Fair
$15.53
Bull
$20.20
Bear
$10.87
-22.2%
ROTCE 6.7% → 0.68x TBV
Fair
$15.53
+11.2%
ROTCE 9.0% → 1.24x TBV
Bull
$20.20
+44.6%
ROTCE 10.3% → 1.57x TBV
Key Value Driver
ROTCE (9.0%) vs. cost of equity (8.0%)
Implied Market Multiple
1.45x
Summary
Our base-case estimate uses P/Tangible Book × ROE Quality. We then blend that result with the average analyst price target of $14.67 from 14 analysts, using a 20% weight on analyst consensus. That produces an estimated intrinsic value of $15.53 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.
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