PGC
Peapack-Gladstone Financial Corporation
$45.78
Banks, Insurers & Asset Managers
85%
P/Tangible Book × ROE Quality
Strong
·
Conviction
Overvalued
Trading 53.6% above fair value
You pay
$45.78
Bear
$20.87
Fair
$29.81
Bull
$38.75
Bear
$20.87
-54.4%
ROTCE 4.6% → 0.30x TBV
Fair
$29.81
-34.9%
ROTCE 6.1% → 0.48x TBV
Bull
$38.75
-15.3%
ROTCE 7.0% → 0.70x TBV
Adjust Assumptions
6.1%
8.3%
Key Value Driver
ROTCE (6.1%) vs. cost of equity (8.3%)
Implied Market Multiple
1.32x
Analyst Consensus (External Reference)
Never blended into the bear/base/bull estimates above.
Average Target (8 analysts)
$56.50
Divergence from AlphaVal
47%
Summary
With ROTCE of 6.1% vs. 8.3% cost of equity, fair P/TBV is 0.48x on $34.66 tangible book, implying $29.81 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 $56.50 (from 8 analysts). Our estimate is 47% 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