NWBI
Northwest Bancshares, Inc.
$14.68
Banks, Insurers & Asset Managers
85%
P/Tangible Book × ROE Quality
Mild
·
Conviction
Fair Value
Trading 6.8% below fair value
You pay
$14.68
Bear
$11.02
Fair
$15.75
Bull
$20.48
Bear
$11.02
-24.9%
ROTCE 6.7% → 0.66x TBV
Fair
$15.75
+7.3%
ROTCE 9.0% → 1.21x TBV
Bull
$20.48
+39.5%
ROTCE 10.3% → 1.53x TBV
Adjust Assumptions
9.0%
8.1%
Key Value Driver
ROTCE (9.0%) vs. cost of equity (8.1%)
Implied Market Multiple
1.53x
Analyst Consensus (External Reference)
Never blended into the bear/base/bull estimates above.
Average Target (15 analysts)
$17.50
Divergence from AlphaVal
10%
Summary
With ROTCE of 9.0% vs. 8.1% cost of equity, fair P/TBV is 1.21x on $9.61 tangible book, implying $15.75 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