PNC
The PNC Financial Services Group, Inc.
$253.25
Banks, Insurers & Asset Managers
85%
P/Tangible Book × ROE Quality
Mild
·
Conviction
Fair Value
Trading 0.3% below fair value
You pay
$253.25
Bear
$167.54
Fair
$253.92
Bull
$305.74
Bear
$167.54
-33.8%
ROTCE 11.3% → 1.40x TBV
Fair
$253.92
+0.3%
ROTCE 15.1% → 2.12x TBV
Bull
$305.74
+20.7%
ROTCE 17.4% → 2.55x TBV
Key Value Driver
ROTCE (15.1%) vs. cost of equity (9.2%)
Implied Market Multiple
2.21x
Summary
Our base-case estimate uses P/Tangible Book × ROE Quality. We then blend that result with the average analyst price target of $280.46 from 46 analysts, using a 30% weight on analyst consensus. That produces an estimated intrinsic value of $253.92 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