RNST
Renasant Corporation
$41.00
Banks, Insurers & Asset Managers
85%
P/Tangible Book × ROE Quality
Mild
·
Conviction
Fair Value
Trading 4.4% below fair value
You pay
$41.00
Bear
$30.02
Fair
$42.89
Bull
$55.75
Bear
$30.02
-26.8%
ROTCE 5.8% → 0.32x TBV
Fair
$42.89
+4.6%
ROTCE 7.8% → 0.66x TBV
Bull
$55.75
+36.0%
ROTCE 8.9% → 0.86x TBV
Key Value Driver
ROTCE (7.8%) vs. cost of equity (9.7%)
Implied Market Multiple
1.62x
Summary
Our base-case estimate uses P/Tangible Book × ROE Quality. We then blend that result with the average analyst price target of $38.80 from 16 analysts, using a 25% weight on analyst consensus. That produces an estimated intrinsic value of $42.89 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.
Return on equity (7.8%) is below the minimum investors require (9.7%). This means the bank is worth less than the net assets on its books.
Dividend-based valuation: $10.51 (76% 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