TSLX
Sixth Street Specialty Lending, Inc.
$16.81
Banks, Insurers & Asset Managers
85%
P/Tangible Book × ROE Quality
Strong
·
Conviction
Undervalued
Trading 63.3% below fair value
You pay
$16.81
Bear
$32.03
Fair
$45.76
Bull
$59.49
Bear
$32.03
+90.6%
ROTCE 8.0% → 1.01x TBV
Fair
$45.76
+172.2%
ROTCE 10.6% → 1.69x TBV
Bull
$59.49
+253.9%
ROTCE 12.2% → 2.09x TBV
Adjust Assumptions
10.6%
7.9%
Key Value Driver
ROTCE (10.6%) vs. cost of equity (7.9%)
Implied Market Multiple
0.99x
Analyst Consensus (External Reference)
Never blended into the bear/base/bull estimates above.
Average Target (17 analysts)
$20.00
Divergence from AlphaVal
129%
Summary
With ROTCE of 10.6% vs. 7.9% cost of equity, fair P/TBV is 1.69x on $16.92 tangible book, implying $45.76 per share. DDM cross-check: $38.10.
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.
Wall Street's average price target is $20.00 (from 17 analysts). Our estimate is 129% 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