STBA
S&T Bancorp, Inc.
$44.86
Banks, Insurers & Asset Managers
85%
P/Tangible Book × ROE Quality
Mild
·
Conviction
Fair Value
Trading 8.5% below fair value
You pay
$44.86
Bear
$34.34
Fair
$49.05
Bull
$63.77
Bear
$34.34
-23.5%
ROTCE 9.3% → 1.06x TBV
Fair
$49.05
+9.3%
ROTCE 12.3% → 1.68x TBV
Bull
$63.77
+42.2%
ROTCE 14.2% → 2.05x TBV
Key Value Driver
ROTCE (12.3%) vs. cost of equity (9.0%)
Implied Market Multiple
1.48x
Summary
Our base-case estimate uses P/Tangible Book × ROE Quality. We then blend that result with the average analyst price target of $37.67 from 12 analysts, using a 20% weight on analyst consensus. That produces an estimated intrinsic value of $49.05 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: $31.83 (39% below our primary estimate). Large gaps suggest the dividend may not fully reflect the company's value.
Wall Street's average price target is $37.67 (from 12 analysts). Our estimate is 38% 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