TRMK
Trustmark Corporation
$44.40
Banks, Insurers & Asset Managers
85%
P/Tangible Book × ROE Quality
Moderate
·
Conviction
Undervalued
Trading 29.1% below fair value
You pay
$44.40
Bear
$39.65
Fair
$62.64
Bull
$76.45
Bear
$39.65
-10.7%
ROTCE 9.4% → 1.39x TBV
Fair
$62.64
+41.1%
ROTCE 12.5% → 2.20x TBV
Bull
$76.45
+72.2%
ROTCE 14.4% → 2.68x TBV
Key Value Driver
ROTCE (12.5%) vs. cost of equity (7.9%)
Implied Market Multiple
1.46x
Summary
Our base-case estimate uses P/Tangible Book × ROE Quality. We then blend that result with the average analyst price target of $45.50 from 9 analysts, using a 20% weight on analyst consensus. That produces an estimated intrinsic value of $62.64 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: $14.99 (78% below our primary estimate). Large gaps suggest the dividend may not fully reflect the company's value.
Wall Street's average price target is $45.50 (from 9 analysts). Our estimate is 47% 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