TFC
Truist Financial Corporation
$47.73
Banks, Insurers & Asset Managers
85%
P/Tangible Book × ROE Quality
Moderate
·
Conviction
Fair Value
Trading 16.7% below fair value
You pay
$47.73
Bear
$40.11
Fair
$57.30
Bull
$74.49
Bear
$40.11
-16.0%
ROTCE 8.5% → 0.85x TBV
Fair
$57.30
+20.1%
ROTCE 11.3% → 1.39x TBV
Bull
$74.49
+56.1%
ROTCE 13.0% → 1.71x TBV
Adjust Assumptions
11.3%
9.3%
Key Value Driver
ROTCE (11.3%) vs. cost of equity (9.3%)
Implied Market Multiple
1.25x
Analyst Consensus (External Reference)
Never blended into the bear/base/bull estimates above.
Average Target (54 analysts)
$55.13
Divergence from AlphaVal
4%
Summary
With ROTCE of 11.3% vs. 9.3% cost of equity, fair P/TBV is 1.39x on $38.32 tangible book, implying $57.30 per share. DDM cross-check: $26.03.
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: $26.03 (55% 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