TRU
TransUnion
$79.88
Banks, Insurers & Asset Managers
80%
P/Tangible Book × ROE Quality
Strong
·
Conviction
Overvalued
Trading 203.6% above fair value
You pay
$79.88
Bear
$18.42
Fair
$26.31
Bull
$34.20
Bear
$18.42
-76.9%
ROTCE 7.7% → 0.42x TBV
Fair
$26.31
-67.1%
ROTCE 10.3% → 0.71x TBV
Bull
$34.20
-57.2%
ROTCE 11.8% → 0.89x TBV
Adjust Assumptions
10.3%
12.8%
Key Value Driver
ROTCE (10.3%) vs. cost of equity (12.8%)
Implied Market Multiple
3.45x
Analyst Consensus (External Reference)
Never blended into the bear/base/bull estimates above.
Average Target (27 analysts)
$94.90
Divergence from AlphaVal
72%
Summary
With ROTCE of 10.3% vs. 12.8% cost of equity, fair P/TBV is 0.71x on $23.17 tangible book, implying $26.31 per share. DDM cross-check: $6.35.
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.
Return on equity (10.3%) is below the minimum investors require (12.8%). This means the bank is worth less than the net assets on its books.
Dividend-based valuation: $6.35 (76% below our primary estimate). Large gaps suggest the dividend may not fully reflect the company's value.
Wall Street's average price target is $94.90 (from 27 analysts). Our estimate is 72% below 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