TRMK
Trustmark Corporation
$44.90
Banks, Insurers & Asset Managers
85%
P/Tangible Book × ROE Quality
Moderate
·
Conviction
Undervalued
Trading 33.0% below fair value
You pay
$44.90
Bear
$42.40
Fair
$66.99
Bull
$81.75
Bear
$42.40
-5.6%
ROTCE 9.4% → 1.38x TBV
Fair
$66.99
+49.2%
ROTCE 12.5% → 2.18x TBV
Bull
$81.75
+82.1%
ROTCE 14.4% → 2.66x TBV
Adjust Assumptions
12.5%
7.9%
Key Value Driver
ROTCE (12.5%) vs. cost of equity (7.9%)
Implied Market Multiple
1.46x
Analyst Consensus (External Reference)
Never blended into the bear/base/bull estimates above.
Average Target (9 analysts)
$47.50
Divergence from AlphaVal
41%
Summary
With ROTCE of 12.5% vs. 7.9% cost of equity, fair P/TBV is 2.18x on $30.69 tangible book, implying $66.99 per share. DDM cross-check: $15.61.
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: $15.61 (77% below our primary estimate). Large gaps suggest the dividend may not fully reflect the company's value.
Wall Street's average price target is $47.50 (from 9 analysts). Our estimate is 41% 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