RJF
Raymond James Financial, Inc.
$158.07
Banks, Insurers & Asset Managers
85%
P/Tangible Book × ROE Quality
Moderate
·
Conviction
Fair Value
Trading 23.7% below fair value
You pay
$158.07
Bear
$145.05
Fair
$207.22
Bull
$269.39
Bear
$145.05
-8.2%
ROTCE 15.0% → 2.00x TBV
Fair
$207.22
+31.1%
ROTCE 20.0% → 2.91x TBV
Bull
$269.39
+70.4%
ROTCE 23.0% → 3.46x TBV
Adjust Assumptions
20.0%
9.5%
Key Value Driver
ROTCE (20.0%) vs. cost of equity (9.5%)
Implied Market Multiple
2.85x
Analyst Consensus (External Reference)
Never blended into the bear/base/bull estimates above.
Average Target (27 analysts)
$178.50
Divergence from AlphaVal
16%
Summary
With ROTCE of 20.0% vs. 9.5% cost of equity, fair P/TBV is 2.91x on $55.47 tangible book, implying $207.22 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