TRU
TransUnion
$72.94
Banks, Insurers & Asset Managers
80%
P/Tangible Book × ROE Quality
Strong
·
Conviction
Overvalued
Trading 68.6% above fair value
You pay
$72.94
Bear
$30.29
Fair
$43.28
Bull
$56.27
Bear
$30.29
-58.5%
ROTCE 7.7% → 0.42x TBV
Fair
$43.28
-40.7%
ROTCE 10.3% → 0.71x TBV
Bull
$56.27
-22.9%
ROTCE 11.8% → 0.89x TBV
Key Value Driver
ROTCE (10.3%) vs. cost of equity (12.8%)
Implied Market Multiple
3.17x
Summary
Our base-case estimate uses P/Tangible Book × ROE Quality. We then blend that result with the average analyst price target of $92.56 from 27 analysts, using a 25% weight on analyst consensus. That produces an estimated intrinsic value of $43.28 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.
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: $6.28 (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 $92.56 (from 27 analysts). Our estimate is 71% 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