STBA
S&T Bancorp, Inc.
$50.78
Banks, Insurers & Asset Managers
85%
P/Tangible Book × ROE Quality
Mild
·
Conviction
Fair Value
Trading 1.8% below fair value
You pay
$50.78
Bear
$36.20
Fair
$51.72
Bull
$67.24
Bear
$36.20
-28.7%
ROTCE 9.3% → 1.08x TBV
Fair
$51.72
+1.9%
ROTCE 12.3% → 1.71x TBV
Bull
$67.24
+32.4%
ROTCE 14.2% → 2.09x TBV
Key Value Driver
ROTCE (12.3%) vs. cost of equity (8.9%)
Implied Market Multiple
1.68x
Summary
Our base-case estimate uses P/Tangible Book × ROE Quality. We then blend that result with the average analyst price target of $51.00 from 12 analysts, using a 20% weight on analyst consensus. That produces an estimated intrinsic value of $51.72 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: $32.36 (38% 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