PNC
The PNC Financial Services Group, Inc.
$222.89
Banks, Insurers & Asset Managers
85%
P/Tangible Book × ROE Quality
Mild
·
Conviction
Fair Value
Trading 5.4% below fair value
You pay
$222.89
Bear
$155.53
Fair
$235.72
Bull
$283.83
Bear
$155.53
-30.2%
ROTCE 11.3% → 1.35x TBV
Fair
$235.72
+5.8%
ROTCE 15.1% → 2.05x TBV
Bull
$283.83
+27.3%
ROTCE 17.4% → 2.46x TBV
Adjust Assumptions
15.1%
9.4%
Key Value Driver
ROTCE (15.1%) vs. cost of equity (9.4%)
Implied Market Multiple
1.93x
Analyst Consensus (External Reference)
Never blended into the bear/base/bull estimates above.
Average Target (46 analysts)
$272.80
Divergence from AlphaVal
14%
Summary
With ROTCE of 15.1% vs. 9.4% cost of equity, fair P/TBV is 2.05x on $115.22 tangible book, implying $235.72 per share. DDM cross-check: $183.33.
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