RF
Regions Financial Corporation
$27.83
Banks, Insurers & Asset Managers
85%
P/Tangible Book × ROE Quality
Moderate
·
Conviction
Fair Value
Trading 22.6% below fair value
You pay
$27.83
Bear
$25.18
Fair
$35.97
Bull
$46.76
Bear
$25.18
-9.5%
ROTCE 12.3% → 1.38x TBV
Fair
$35.97
+29.2%
ROTCE 16.4% → 2.07x TBV
Bull
$46.76
+68.0%
ROTCE 18.8% → 2.48x TBV
Key Value Driver
ROTCE (16.4%) vs. cost of equity (10.0%)
Implied Market Multiple
1.8x
Summary
Our base-case estimate uses P/Tangible Book × ROE Quality. We then blend that result with the average analyst price target of $30.78 from 52 analysts, using a 35% weight on analyst consensus. That produces an estimated intrinsic value of $35.97 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.
Dividend-based valuation: $166.25 (329% above our primary estimate). Large gaps suggest the dividend may not fully reflect the company's value.
Wall Street's average price target is $30.78 (from 52 analysts). Our estimate is 26% above the consensus -- consider that gap carefully.
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