OCFC
OceanFirst Financial Corp.
$19.91
Banks, Insurers & Asset Managers
85%
P/Tangible Book × ROE Quality
Mild
·
Conviction
Overvalued
Trading 6.2% above fair value
You pay
$19.91
Bear
$13.13
Fair
$18.76
Bull
$24.39
Bear
$13.13
-34.1%
ROTCE 4.7% → 0.30x TBV
Fair
$18.76
-5.8%
ROTCE 6.2% → 0.40x TBV
Bull
$24.39
+22.5%
ROTCE 7.2% → 0.57x TBV
Key Value Driver
ROTCE (6.2%) vs. cost of equity (9.6%)
Implied Market Multiple
1.01x
Summary
Our base-case estimate uses P/Tangible Book × ROE Quality. We then blend that result with the average analyst price target of $19.00 from 8 analysts, using a 20% weight on analyst consensus. That produces an estimated intrinsic value of $18.76 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 (9.6%). This means the bank is worth less than the net assets on its books.
Dividend-based valuation: $13.14 (30% 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