TRMK
Trustmark Corporation
$45.18
Banks, Insurers & Asset Managers
85%
P/Tangible Book × ROE Quality
Moderate
·
Conviction
Undervalued
Trading 33.8% below fair value
You pay
$45.18
Bear
$43.22
Fair
$68.29
Bull
$83.32
Bear
$43.22
-4.3%
ROTCE 9.4% → 1.42x TBV
Fair
$68.29
+51.1%
ROTCE 12.5% → 2.24x TBV
Bull
$83.32
+84.4%
ROTCE 14.4% → 2.73x TBV
Adjust Assumptions
12.5%
7.8%
Key Value Driver
ROTCE (12.5%) vs. cost of equity (7.8%)
Implied Market Multiple
1.48x
Analyst Consensus (External Reference)
Never blended into the bear/base/bull estimates above.
Average Target (9 analysts)
$47.50
Divergence from AlphaVal
44%
Summary
With ROTCE of 12.5% vs. 7.8% cost of equity, fair P/TBV is 2.24x on $30.49 tangible book, implying $68.29 per share. DDM cross-check: $15.85.
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: $15.85 (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 44% 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