OWL
Blue Owl Capital Inc.
$10.06
Banks, Insurers & Asset Managers
90%
P/Tangible Book × ROE Quality
Strong
·
Conviction
Overvalued
Trading 65.2% above fair value
You pay
$10.06
Bear
$4.26
Fair
$6.09
Bull
$7.92
Bear
$4.26
-57.7%
ROTCE 4.0% → 0.30x TBV
Fair
$6.09
-39.5%
ROTCE 3.6% → 0.30x TBV
Bull
$7.92
-21.3%
ROTCE 4.1% → 0.30x TBV
Key Value Driver
ROTCE (3.6%) vs. cost of equity (10.8%)
Implied Market Multiple
7.13x
Summary
Our base-case estimate uses P/Tangible Book × ROE Quality. We then blend that result with the average analyst price target of $15.78 from 19 analysts, using a 25% weight on analyst consensus. That produces an estimated intrinsic value of $6.09 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 (3.6%) is below the minimum investors require (10.8%). This means the bank is worth less than the net assets on its books.
Wall Street's average price target is $15.78 (from 19 analysts). Our estimate is 82% below 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