PRI
Primerica, Inc.
$292.44
Banks, Insurers & Asset Managers
85%
P/Tangible Book × ROE Quality
Mild
·
Conviction
Fair Value
Trading 6.8% below fair value
You pay
$292.44
Bear
$251.42
Fair
$313.74
Bull
$313.74
Bear
$251.42
-14.0%
ROTCE 20.0% → 3.21x TBV
Fair
$313.74
+7.3%
ROTCE 25.0% → 4.00x TBV
Bull
$313.74
+7.3%
ROTCE 30.0% → 4.00x TBV
Adjust Assumptions
30.7%
9.0%
Key Value Driver
ROTCE (30.7%) vs. cost of equity (9.0%)
Implied Market Multiple
3.73x
Analyst Consensus (External Reference)
Never blended into the bear/base/bull estimates above.
Average Target (18 analysts)
$301.33
Divergence from AlphaVal
4%
Summary
With ROTCE of 30.7% vs. 9.0% cost of equity, fair P/TBV is 4.00x on $78.43 tangible book, implying $313.74 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