ORI
Old Republic International Corporation
$38.17
Banks, Insurers & Asset Managers
85%
P/Tangible Book × ROE Quality
Strong
·
Conviction
Undervalued
Trading 54.8% below fair value
You pay
$38.17
Bear
$57.13
Fair
$84.36
Bull
$86.68
Bear
$57.13
+49.7%
ROTCE 13.3% → 2.64x TBV
Fair
$84.36
+121.0%
ROTCE 17.7% → 3.89x TBV
Bull
$86.68
+127.1%
ROTCE 20.4% → 4.00x TBV
Adjust Assumptions
17.7%
7.5%
Key Value Driver
ROTCE (17.7%) vs. cost of equity (7.5%)
Implied Market Multiple
1.76x
Analyst Consensus (External Reference)
Never blended into the bear/base/bull estimates above.
Average Target (5 analysts)
$41.50
Divergence from AlphaVal
103%
Summary
With ROTCE of 17.7% vs. 7.5% cost of equity, fair P/TBV is 3.89x on $21.67 tangible book, implying $84.36 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 $41.50 (from 5 analysts). Our estimate is 103% 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