OZK
Bank OZK
$48.14
Banks, Insurers & Asset Managers
85%
P/Tangible Book × ROE Quality
Strong
·
Conviction
Undervalued
Trading 40.2% below fair value
You pay
$48.14
Bear
$56.37
Fair
$80.54
Bull
$104.70
Bear
$56.37
+17.1%
ROTCE 9.8% → 1.11x TBV
Fair
$80.54
+67.3%
ROTCE 13.1% → 1.73x TBV
Bull
$104.70
+117.5%
ROTCE 15.0% → 2.10x TBV
Key Value Driver
ROTCE (13.1%) vs. cost of equity (9.3%)
Implied Market Multiple
0.96x
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 $80.54 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: $673.10 (664% 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 52% 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