PAX
Patria Investments Ltd
$11.10
Banks, Insurers & Asset Managers
85%
P/Tangible Book × ROE Quality
Moderate
·
Conviction
Undervalued
Trading 33.5% below fair value
You pay
$11.10
Bear
$11.70
Fair
$16.70
Bull
$21.71
Bear
$11.70
+5.4%
ROTCE 10.5% → 1.48x TBV
Fair
$16.70
+50.5%
ROTCE 14.0% → 2.28x TBV
Bull
$21.71
+95.6%
ROTCE 16.1% → 2.75x TBV
Key Value Driver
ROTCE (14.0%) vs. cost of equity (8.4%)
Implied Market Multiple
2.89x
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