PIPR
Piper Sandler Companies
$65.66
Banks, Insurers & Asset Managers
85%
P/Tangible Book × ROE Quality
Moderate
·
Conviction
Overvalued
Trading 16.6% above fair value
You pay
$65.66
Bear
$39.42
Fair
$56.32
Bull
$73.22
Bear
$39.42
-40.0%
ROTCE 20.0% → 1.99x TBV
Fair
$56.32
-14.2%
ROTCE 25.0% → 2.61x TBV
Bull
$73.22
+11.5%
ROTCE 30.0% → 3.23x TBV
Adjust Assumptions
29.5%
12.0%
Key Value Driver
ROTCE (29.5%) vs. cost of equity (12.0%)
Implied Market Multiple
4.65x
Analyst Consensus (External Reference)
Never blended into the bear/base/bull estimates above.
Average Target (11 analysts)
$80.00
Divergence from AlphaVal
30%
Summary
With ROTCE of 29.5% vs. 12.0% cost of equity, fair P/TBV is 2.61x on $14.11 tangible book, implying $56.32 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 $80.00 (from 11 analysts). Our estimate is 30% 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