SSREY
Swiss Re AG
$46.14
Banks, Insurers & Asset Managers
85%
P/Tangible Book × ROE Quality
Moderate
·
Conviction
Undervalued
Trading 35.5% below fair value
Bear
$71.52
+55.0%
ROTCE 16.9% → 4.00x TBV
Fair
$71.52
+55.0%
ROTCE 22.6% → 4.00x TBV
Bull
$71.52
+55.0%
ROTCE 26.0% → 4.00x TBV
Adjust Assumptions
22.6%
6.2%
Key Value Driver
ROTCE (22.6%) vs. cost of equity (6.2%)
Implied Market Multiple
2.58x
Summary
With ROTCE of 22.6% vs. 6.2% cost of equity, fair P/TBV is 4.00x on $17.88 tangible book, implying $71.52 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.
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