RNR
RenaissanceRe Holdings Ltd.
$328.78
Banks, Insurers & Asset Managers
85%
P/Tangible Book × ROE Quality
Strong
·
Conviction
Undervalued
Trading 63.8% below fair value
Bear
$908.46
+176.3%
ROTCE 20.0% → 4.00x TBV
Fair
$908.46
+176.3%
ROTCE 25.0% → 4.00x TBV
Bull
$908.46
+176.3%
ROTCE 30.0% → 4.00x TBV
Adjust Assumptions
28.4%
6.0%
Key Value Driver
ROTCE (28.4%) vs. cost of equity (6.0%)
Implied Market Multiple
1.45x
Analyst Consensus (External Reference)
Never blended into the bear/base/bull estimates above.
Average Target (28 analysts)
$332.29
Divergence from AlphaVal
173%
Summary
With ROTCE of 28.4% vs. 6.0% cost of equity, fair P/TBV is 4.00x on $227.11 tangible book, implying $908.46 per share. DDM cross-check: $42.53.
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: $42.53 (95% below our primary estimate). Large gaps suggest the dividend may not fully reflect the company's value.
Wall Street's average price target is $332.29 (from 28 analysts). Our estimate is 173% 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