PGC
Peapack-Gladstone Financial Corporation
$46.99
Banks, Insurers & Asset Managers
85%
P/Tangible Book × ROE Quality
Moderate
·
Conviction
Overvalued
Trading 35.2% above fair value
You pay
$46.99
Bear
$24.33
Fair
$34.75
Bull
$45.17
Bear
$24.33
-48.2%
ROTCE 4.6% → 0.30x TBV
Fair
$34.75
-26.1%
ROTCE 6.1% → 0.49x TBV
Bull
$45.17
-3.9%
ROTCE 7.0% → 0.71x TBV
Key Value Driver
ROTCE (6.1%) vs. cost of equity (8.2%)
Implied Market Multiple
1.36x
Summary
Our base-case estimate uses P/Tangible Book × ROE Quality. We then blend that result with the average analyst price target of $54.50 from 8 analysts, using a 20% weight on analyst consensus. That produces an estimated intrinsic value of $34.75 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.
Return on equity (6.1%) is below the minimum investors require (8.2%). This means the bank is worth less than the net assets on its books.
Wall Street's average price target is $54.50 (from 8 analysts). Our estimate is 45% below 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