PNC
The PNC Financial Services Group, Inc.
$245.60
Banks, Insurers & Asset Managers
85%
P/Tangible Book × ROE Quality
Mild
·
Conviction
Fair Value
Trading 0.2% below fair value
You pay
$245.60
Bear
$162.43
Fair
$246.17
Bull
$296.42
Bear
$162.43
-33.9%
ROTCE 11.3% → 1.41x TBV
Fair
$246.17
+0.2%
ROTCE 15.1% → 2.14x TBV
Bull
$296.42
+20.7%
ROTCE 17.4% → 2.57x TBV
Adjust Assumptions
15.1%
9.2%
Key Value Driver
ROTCE (15.1%) vs. cost of equity (9.2%)
Implied Market Multiple
2.13x
Analyst Consensus (External Reference)
Never blended into the bear/base/bull estimates above.
Average Target (46 analysts)
$279.36
Divergence from AlphaVal
12%
Summary
With ROTCE of 15.1% vs. 9.2% cost of equity, fair P/TBV is 2.14x on $115.21 tangible book, implying $246.17 per share. DDM cross-check: $189.17.
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