PRI
Primerica, Inc.
$279.75
Banks, Insurers & Asset Managers
85%
P/Tangible Book × ROE Quality
Mild
·
Conviction
Fair Value
Trading 9.2% below fair value
You pay
$279.75
Bear
$232.52
Fair
$308.06
Bull
$308.06
Bear
$232.52
-16.9%
ROTCE 20.0% → 3.02x TBV
Fair
$308.06
+10.1%
ROTCE 25.0% → 4.00x TBV
Bull
$308.06
+10.1%
ROTCE 30.0% → 4.00x TBV
Key Value Driver
ROTCE (30.7%) vs. cost of equity (9.3%)
Implied Market Multiple
3.57x
Summary
Our base-case estimate uses P/Tangible Book × ROE Quality. We then blend that result with the average analyst price target of $291.00 from 18 analysts, using a 25% weight on analyst consensus. That produces an estimated intrinsic value of $308.06 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