PGR
The Progressive Corporation
$213.83
Banks, Insurers & Asset Managers
85%
P/Tangible Book × ROE Quality
Mild
·
Conviction
Overvalued
Trading 4.8% above fair value
Bear
$203.97
-4.6%
ROTCE 20.0% → 4.00x TBV
Fair
$203.97
-4.6%
ROTCE 25.0% → 4.00x TBV
Bull
$203.97
-4.6%
ROTCE 30.0% → 4.00x TBV
Key Value Driver
ROTCE (40.0%) vs. cost of equity (6.0%)
Implied Market Multiple
4.4x
Summary
Our base-case estimate uses P/Tangible Book × ROE Quality. We then blend that result with the average analyst price target of $225.92 from 41 analysts, using a 30% weight on analyst consensus. That produces an estimated intrinsic value of $203.97 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.
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