STT
State Street Corporation
$182.50
Banks, Insurers & Asset Managers
85%
P/Tangible Book × ROE Quality
Mild
·
Conviction
Fair Value
Trading 1.4% below fair value
You pay
$182.50
Bear
$129.53
Fair
$185.04
Bull
$240.55
Bear
$129.53
-29.0%
ROTCE 11.8% → 0.95x TBV
Fair
$185.04
+1.4%
ROTCE 15.7% → 1.43x TBV
Bull
$240.55
+31.8%
ROTCE 18.1% → 1.72x TBV
Key Value Driver
ROTCE (15.7%) vs. cost of equity (12.2%)
Implied Market Multiple
2.69x
Summary
Our base-case estimate uses P/Tangible Book × ROE Quality. We then blend that result with the average analyst price target of $180.60 from 37 analysts, using a 30% weight on analyst consensus. That produces an estimated intrinsic value of $185.04 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: $89.17 (52% 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