TSLX
Sixth Street Specialty Lending, Inc.
$16.72
Banks, Insurers & Asset Managers
85%
P/Tangible Book × ROE Quality
Strong
·
Conviction
Undervalued
Trading 57.5% below fair value
You pay
$16.72
Bear
$27.52
Fair
$39.32
Bull
$51.12
Bear
$27.52
+64.6%
ROTCE 8.0% → 1.04x TBV
Fair
$39.32
+135.2%
ROTCE 10.6% → 1.74x TBV
Bull
$51.12
+205.7%
ROTCE 12.2% → 2.16x TBV
Key Value Driver
ROTCE (10.6%) vs. cost of equity (7.8%)
Implied Market Multiple
0.99x
Summary
Our base-case estimate uses P/Tangible Book × ROE Quality. We then blend that result with the average analyst price target of $20.00 from 17 analysts, using a 25% weight on analyst consensus. That produces an estimated intrinsic value of $39.32 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.
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