PFG
Principal Financial Group, Inc.
$114.09
Banks, Insurers & Asset Managers
85%
P/Tangible Book × ROE Quality
Mild
·
Conviction
Overvalued
Trading 0.9% above fair value
You pay
$114.09
Bear
$79.11
Fair
$113.02
Bull
$146.92
Bear
$79.11
-30.7%
ROTCE 18.0% → 2.70x TBV
Fair
$113.02
-0.9%
ROTCE 24.0% → 3.85x TBV
Bull
$146.92
+28.8%
ROTCE 27.6% → 4.00x TBV
Key Value Driver
ROTCE (24.0%) vs. cost of equity (9.2%)
Implied Market Multiple
4.98x
Summary
Our base-case estimate uses P/Tangible Book × ROE Quality. We then blend that result with the average analyst price target of $104.67 from 25 analysts, using a 25% weight on analyst consensus. That produces an estimated intrinsic value of $113.02 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: $79.36 (31% below our primary estimate). Large gaps suggest the dividend may not fully reflect the company's value.
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