OCFC
OceanFirst Financial Corp.
$16.10
Banks, Insurers & Asset Managers
85%
P/Tangible Book × ROE Quality
Moderate
·
Conviction
Undervalued
Trading 36.9% below fair value
You pay
$16.10
Bear
$17.85
Fair
$25.50
Bull
$33.15
Bear
$17.85
+10.9%
ROTCE 4.7% → 0.30x TBV
Fair
$25.50
+58.4%
ROTCE 6.2% → 0.39x TBV
Bull
$33.15
+105.9%
ROTCE 7.2% → 0.55x TBV
Adjust Assumptions
6.2%
9.8%
Key Value Driver
ROTCE (6.2%) vs. cost of equity (9.8%)
Implied Market Multiple
1.37x
Analyst Consensus (External Reference)
Never blended into the bear/base/bull estimates above.
Average Target (8 analysts)
$18.00
Divergence from AlphaVal
42%
Summary
With ROTCE of 6.2% vs. 9.8% cost of equity, fair P/TBV is 0.39x on $11.75 tangible book, implying $25.50 per share. DDM cross-check: $11.12.
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 (9.8%). This means the bank is worth less than the net assets on its books.
Dividend-based valuation: $11.12 (56% below our primary estimate). Large gaps suggest the dividend may not fully reflect the company's value.
Wall Street's average price target is $18.00 (from 8 analysts). Our estimate is 42% above the consensus -- consider that gap carefully.
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