TPG
TPG Inc.
$41.79
Banks, Insurers & Asset Managers
85%
P/Tangible Book × ROE Quality
Strong
·
Conviction
Undervalued
Trading 70.6% below fair value
You pay
$41.79
Bear
$99.55
Fair
$142.22
Bull
$184.88
Bear
$99.55
+138.2%
ROTCE 20.0% → 1.96x TBV
Fair
$142.22
+240.3%
ROTCE 25.0% → 4.00x TBV
Bull
$184.88
+342.4%
ROTCE 30.0% → 3.18x TBV
Key Value Driver
ROTCE (678.9%) vs. cost of equity (12.2%)
Implied Market Multiple
589.17x
Summary
Our base-case estimate uses P/Tangible Book × ROE Quality. We then blend that result with the average analyst price target of $55.38 from 17 analysts, using a 25% weight on analyst consensus. That produces an estimated intrinsic value of $142.22 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.
Wall Street's average price target is $55.38 (from 17 analysts). Our estimate is 209% 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