RF
Regions Financial Corporation
$27.07
Banks, Insurers & Asset Managers
85%
P/Tangible Book × ROE Quality
Moderate
·
Conviction
Undervalued
Trading 30.2% below fair value
You pay
$27.07
Bear
$27.13
Fair
$38.76
Bull
$50.39
Bear
$27.13
+0.2%
ROTCE 12.3% → 1.35x TBV
Fair
$38.76
+43.2%
ROTCE 16.4% → 2.02x TBV
Bull
$50.39
+86.1%
ROTCE 18.8% → 2.42x TBV
Adjust Assumptions
16.4%
10.1%
Key Value Driver
ROTCE (16.4%) vs. cost of equity (10.1%)
Implied Market Multiple
1.75x
Analyst Consensus (External Reference)
Never blended into the bear/base/bull estimates above.
Average Target (52 analysts)
$32.78
Divergence from AlphaVal
18%
Summary
With ROTCE of 16.4% vs. 10.1% cost of equity, fair P/TBV is 2.02x on $15.43 tangible book, implying $38.76 per share. DDM cross-check: $110.71.
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: $110.71 (186% above our primary estimate). Large gaps suggest the dividend may not fully reflect the company's value.
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