RNST
Renasant Corporation
$39.01
Banks, Insurers & Asset Managers
85%
P/Tangible Book × ROE Quality
Mild
·
Conviction
Fair Value
Trading 11.8% below fair value
You pay
$39.01
Bear
$30.97
Fair
$44.25
Bull
$57.52
Bear
$30.97
-20.6%
ROTCE 5.8% → 0.31x TBV
Fair
$44.25
+13.4%
ROTCE 7.8% → 0.63x TBV
Bull
$57.52
+47.5%
ROTCE 8.9% → 0.83x TBV
Adjust Assumptions
7.8%
10.0%
Key Value Driver
ROTCE (7.8%) vs. cost of equity (10.0%)
Implied Market Multiple
1.53x
Analyst Consensus (External Reference)
Never blended into the bear/base/bull estimates above.
Average Target (16 analysts)
$48.00
Divergence from AlphaVal
8%
Summary
With ROTCE of 7.8% vs. 10.0% cost of equity, fair P/TBV is 0.63x on $25.52 tangible book, implying $44.25 per share. DDM cross-check: $11.04.
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.
Return on equity (7.8%) is below the minimum investors require (10.0%). This means the bank is worth less than the net assets on its books.
Dividend-based valuation: $11.04 (75% below 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