SFNC
Simmons First National Corporation
$23.48
Banks, Insurers & Asset Managers
85%
P/Tangible Book × ROE Quality
Moderate
·
Conviction
Fair Value
Trading 22.1% below fair value
You pay
$23.48
Bear
$21.11
Fair
$30.15
Bull
$39.20
Bear
$21.11
-10.1%
ROTCE 4.0% → 0.30x TBV
Fair
$30.15
+28.4%
ROTCE -19.7% → 0.30x TBV
Bull
$39.20
+66.9%
ROTCE -22.7% → 0.30x TBV
Key Value Driver
ROTCE (-19.7%) vs. cost of equity (9.4%)
Implied Market Multiple
1.69x
Summary
Our base-case estimate uses P/Tangible Book × ROE Quality. We then blend that result with the average analyst price target of $25.00 from 9 analysts, using a 20% weight on analyst consensus. That produces an estimated intrinsic value of $30.15 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 (-19.7%) is below the minimum investors require (9.4%). This means the bank is worth less than the net assets on its books.
Dividend-based valuation: $13.68 (56% below our primary estimate). Large gaps suggest the dividend may not fully reflect the company's value.
Wall Street's average price target is $25.00 (from 9 analysts). Our estimate is 26% 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