PFBC
Preferred Bank
$94.77
Banks, Insurers & Asset Managers
85%
P/Tangible Book × ROE Quality
Strong
·
Conviction
Undervalued
Trading 58.0% below fair value
You pay
$94.77
Bear
$151.83
Fair
$225.71
Bull
$234.53
Bear
$151.83
+60.2%
ROTCE 12.7% → 2.59x TBV
Fair
$225.71
+138.2%
ROTCE 16.9% → 3.85x TBV
Bull
$234.53
+147.5%
ROTCE 19.5% → 4.00x TBV
Key Value Driver
ROTCE (16.9%) vs. cost of equity (7.4%)
Implied Market Multiple
1.42x
Summary
Our base-case estimate uses P/Tangible Book × ROE Quality. We then blend that result with the average analyst price target of $102.00 from 10 analysts, using a 20% weight on analyst consensus. That produces an estimated intrinsic value of $225.71 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.
Wall Street's average price target is $102.00 (from 10 analysts). Our estimate is 152% 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