PAX
Patria Investments Limited
$11.02
Banks, Insurers & Asset Managers
85%
P/Tangible Book × ROE Quality
Moderate
·
Conviction
Undervalued
Trading 34.0% below fair value
You pay
$11.02
Bear
$11.70
Fair
$16.70
Bull
$21.71
Bear
$11.70
+6.1%
ROTCE 10.5% → 1.42x TBV
Fair
$16.70
+51.6%
ROTCE 14.0% → 2.19x TBV
Bull
$21.71
+97.0%
ROTCE 16.1% → 2.65x TBV
Key Value Driver
ROTCE (14.0%) vs. cost of equity (8.6%)
Implied Market Multiple
2.87x
Summary
Our base-case estimate uses P/Tangible Book × ROE Quality. We then blend that result with the average analyst price target of $18.00 from 5 analysts, using a 20% weight on analyst consensus. That produces an estimated intrinsic value of $16.70 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.
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