PIPR
Piper Sandler Companies
$80.68
Banks, Insurers & Asset Managers
85%
P/Tangible Book × ROE Quality
Mild
·
Conviction
Overvalued
Trading 10.9% above fair value
You pay
$80.68
Bear
$50.93
Fair
$72.76
Bull
$94.60
Bear
$50.93
-36.9%
ROTCE 20.0% → 1.91x TBV
Fair
$72.76
-9.8%
ROTCE 25.0% → 3.04x TBV
Bull
$94.60
+17.2%
ROTCE 30.0% → 3.10x TBV
Key Value Driver
ROTCE (29.5%) vs. cost of equity (12.4%)
Implied Market Multiple
6.02x
Summary
Our base-case estimate uses P/Tangible Book × ROE Quality. We then blend that result with the average analyst price target of $97.58 from 11 analysts, using a 20% weight on analyst consensus. That produces an estimated intrinsic value of $72.76 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.
Wall Street's average price target is $97.58 (from 11 analysts). Our estimate is 32% 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