STT
State Street Corporation
$153.95
Banks, Insurers & Asset Managers
85%
P/Tangible Book × ROE Quality
Mild
·
Conviction
Fair Value
Trading 14.0% below fair value
You pay
$153.95
Bear
$125.29
Fair
$178.99
Bull
$232.69
Bear
$125.29
-18.6%
ROTCE 11.8% → 0.93x TBV
Fair
$178.99
+16.3%
ROTCE 15.7% → 1.41x TBV
Bull
$232.69
+51.1%
ROTCE 18.1% → 1.69x TBV
Key Value Driver
ROTCE (15.7%) vs. cost of equity (12.3%)
Implied Market Multiple
2.27x
Summary
Our base-case estimate uses P/Tangible Book × ROE Quality. We then blend that result with the average analyst price target of $160.44 from 37 analysts, using a 30% weight on analyst consensus. That produces an estimated intrinsic value of $178.99 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: $85.11 (54% 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