STBA
S&T Bancorp, Inc.
$50.64
Banks, Insurers & Asset Managers
85%
P/Tangible Book × ROE Quality
Mild
·
Conviction
Fair Value
Trading 4.3% below fair value
You pay
$50.64
Bear
$33.35
Fair
$52.93
Bull
$64.68
Bear
$33.35
-34.2%
ROTCE 9.3% → 1.08x TBV
Fair
$52.93
+4.5%
ROTCE 12.3% → 1.72x TBV
Bull
$64.68
+27.7%
ROTCE 14.2% → 2.10x TBV
Adjust Assumptions
12.3%
8.9%
Key Value Driver
ROTCE (12.3%) vs. cost of equity (8.9%)
Implied Market Multiple
1.64x
Analyst Consensus (External Reference)
Never blended into the bear/base/bull estimates above.
Average Target (12 analysts)
$53.50
Divergence from AlphaVal
1%
Summary
With ROTCE of 12.3% vs. 8.9% cost of equity, fair P/TBV is 1.72x on $30.86 tangible book, implying $52.93 per share. DDM cross-check: $33.79.
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: $33.79 (36% 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