RGA
Reinsurance Group of America, Incorporated
$231.16
Banks, Insurers & Asset Managers
85%
P/Tangible Book × ROE Quality
Moderate
·
Conviction
Undervalued
Trading 27.6% below fair value
You pay
$231.16
Bear
$172.83
Fair
$319.47
Bull
$407.45
Bear
$172.83
-25.2%
ROTCE 6.6% → 0.90x TBV
Fair
$319.47
+38.2%
ROTCE 8.8% → 1.66x TBV
Bull
$407.45
+76.3%
ROTCE 10.1% → 2.12x TBV
Key Value Driver
ROTCE (8.8%) vs. cost of equity (6.9%)
Implied Market Multiple
1.13x
Summary
Our base-case estimate uses P/Tangible Book × ROE Quality. We then blend that result with the average analyst price target of $256.00 from 22 analysts, using a 25% weight on analyst consensus. That produces an estimated intrinsic value of $319.47 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: $203.04 (40% below our primary estimate). Large gaps suggest the dividend may not fully reflect the company's value.
Wall Street's average price target is $256.00 (from 22 analysts). Our estimate is 33% 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