OZK
Bank OZK
$50.67
Banks, Insurers & Asset Managers
85%
P/Tangible Book × ROE Quality
Moderate
·
Conviction
Undervalued
Trading 37.5% below fair value
You pay
$50.67
Bear
$51.90
Fair
$81.11
Bull
$98.63
Bear
$51.90
+2.4%
ROTCE 9.8% → 1.13x TBV
Fair
$81.11
+60.1%
ROTCE 13.1% → 1.77x TBV
Bull
$98.63
+94.7%
ROTCE 15.0% → 2.16x TBV
Key Value Driver
ROTCE (13.1%) vs. cost of equity (9.1%)
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 $58.00 from 22 analysts, using a 25% weight on analyst consensus. That produces an estimated intrinsic value of $81.11 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.
Dividend-based valuation: $626.40 (605% above our primary estimate). Large gaps suggest the dividend may not fully reflect the company's value.
Wall Street's average price target is $58.00 (from 22 analysts). Our estimate is 53% 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