PGC
Peapack-Gladstone Financial Corporation
$42.83
Banks, Insurers & Asset Managers
85%
P/Tangible Book × ROE Quality
Moderate
·
Conviction
Overvalued
Trading 34.1% above fair value
You pay
$42.83
Bear
$22.37
Fair
$31.95
Bull
$41.53
Bear
$22.37
-47.8%
ROTCE 4.6% → 0.30x TBV
Fair
$31.95
-25.4%
ROTCE 6.1% → 0.49x TBV
Bull
$41.53
-3.0%
ROTCE 7.0% → 0.70x TBV
Key Value Driver
ROTCE (6.1%) vs. cost of equity (8.3%)
Implied Market Multiple
1.24x
Summary
Our base-case estimate uses P/Tangible Book × ROE Quality. We then blend that result with the average analyst price target of $40.50 from 7 analysts, using a 20% weight on analyst consensus. That produces an estimated intrinsic value of $31.95 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 (8.3%). This means the bank is worth less than the net assets on its books.
Wall Street's average price target is $40.50 (from 7 analysts). Our estimate is 26% 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