RJF
Raymond James Financial, Inc.
$169.30
Banks, Insurers & Asset Managers
85%
P/Tangible Book × ROE Quality
Moderate
·
Conviction
Fair Value
Trading 15.2% below fair value
You pay
$169.30
Bear
$139.76
Fair
$199.66
Bull
$259.57
Bear
$139.76
-17.4%
ROTCE 15.0% → 2.02x TBV
Fair
$199.66
+17.9%
ROTCE 20.0% → 2.93x TBV
Bull
$259.57
+53.3%
ROTCE 23.0% → 3.48x TBV
Key Value Driver
ROTCE (20.0%) vs. cost of equity (9.5%)
Implied Market Multiple
3.05x
Summary
Our base-case estimate uses P/Tangible Book × ROE Quality. We then blend that result with the average analyst price target of $177.00 from 25 analysts, using a 25% weight on analyst consensus. That produces an estimated intrinsic value of $199.66 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