OCFC
OceanFirst Financial Corp.
$18.72
Banks, Insurers & Asset Managers
85%
P/Tangible Book × ROE Quality
Mild
·
Conviction
Fair Value
Trading 0.9% below fair value
You pay
$18.72
Bear
$13.23
Fair
$18.89
Bull
$24.56
Bear
$13.23
-29.3%
ROTCE 4.7% → 0.30x TBV
Fair
$18.89
+0.9%
ROTCE 6.2% → 0.39x TBV
Bull
$24.56
+31.2%
ROTCE 7.2% → 0.56x TBV
Key Value Driver
ROTCE (6.2%) vs. cost of equity (9.7%)
Implied Market Multiple
0.95x
Summary
Our base-case estimate uses P/Tangible Book × ROE Quality. We then blend that result with the average analyst price target of $19.67 from 8 analysts, using a 20% weight on analyst consensus. That produces an estimated intrinsic value of $18.89 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.
Return on equity (6.2%) is below the minimum investors require (9.7%). This means the bank is worth less than the net assets on its books.
Dividend-based valuation: $12.89 (31% below our primary estimate). Large gaps suggest the dividend may not fully reflect the company's value.
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