SHBI
Shore Bancshares, Inc.
$20.22
Banks, Insurers & Asset Managers
85%
P/Tangible Book × ROE Quality
Moderate
·
Conviction
Fair Value
Trading 16.0% below fair value
You pay
$20.22
Bear
$15.05
Fair
$24.08
Bull
$29.50
Bear
$15.05
-25.6%
ROTCE 9.0% → 1.03x TBV
Fair
$24.08
+19.1%
ROTCE 12.0% → 1.66x TBV
Bull
$29.50
+45.9%
ROTCE 13.8% → 2.03x TBV
Key Value Driver
ROTCE (12.0%) vs. cost of equity (8.8%)
Implied Market Multiple
1.36x
Summary
Our base-case estimate uses P/Tangible Book × ROE Quality. We then blend that result with the average analyst price target of $22.00 from 6 analysts, using a 20% weight on analyst consensus. That produces an estimated intrinsic value of $24.08 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.
Dividend-based valuation: $6.30 (74% 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