OFG
OFG Bancorp
$52.64
Banks, Insurers & Asset Managers
85%
P/Tangible Book × ROE Quality
Moderate
·
Conviction
Undervalued
Trading 36.2% below fair value
You pay
$52.64
Bear
$54.87
Fair
$82.46
Bull
$99.02
Bear
$54.87
+4.2%
ROTCE 11.9% → 1.79x TBV
Fair
$82.46
+56.7%
ROTCE 15.8% → 2.69x TBV
Bull
$99.02
+88.1%
ROTCE 18.2% → 3.23x TBV
Adjust Assumptions
15.8%
8.4%
Key Value Driver
ROTCE (15.8%) vs. cost of equity (8.4%)
Implied Market Multiple
1.72x
Analyst Consensus (External Reference)
Never blended into the bear/base/bull estimates above.
Average Target (12 analysts)
$56.33
Divergence from AlphaVal
46%
Summary
With ROTCE of 15.8% vs. 8.4% cost of equity, fair P/TBV is 2.69x on $30.66 tangible book, implying $82.46 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.
Wall Street's average price target is $56.33 (from 12 analysts). Our estimate is 46% 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