OFG
OFG Bancorp
$45.05
Banks, Insurers & Asset Managers
85%
P/Tangible Book × ROE Quality
Strong
·
Conviction
Undervalued
Trading 40.6% below fair value
You pay
$45.05
Bear
$50.50
Fair
$75.88
Bull
$91.12
Bear
$50.50
+12.1%
ROTCE 11.9% → 1.82x TBV
Fair
$75.88
+68.4%
ROTCE 15.8% → 2.73x TBV
Bull
$91.12
+102.3%
ROTCE 18.2% → 3.28x TBV
Key Value Driver
ROTCE (15.8%) vs. cost of equity (8.3%)
Implied Market Multiple
1.47x
Summary
Our base-case estimate uses P/Tangible Book × ROE Quality. We then blend that result with the average analyst price target of $44.50 from 12 analysts, using a 20% weight on analyst consensus. That produces an estimated intrinsic value of $75.88 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 $44.50 (from 12 analysts). Our estimate is 88% 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