UBS
UBS Group AG
$46.96
Banks, Insurers & Asset Managers
90%
P/Tangible Book × ROE Quality
Strong
·
Conviction
Overvalued
Trading 105.2% above fair value
You pay
$46.96
Bear
$16.02
Fair
$22.89
Bull
$29.76
Bear
$16.02
-65.9%
ROTCE 5.5% → 0.30x TBV
Fair
$22.89
-51.3%
ROTCE 7.3% → 0.67x TBV
Bull
$29.76
-36.6%
ROTCE 8.4% → 0.90x TBV
Key Value Driver
ROTCE (7.3%) vs. cost of equity (8.9%)
Implied Market Multiple
1.82x
Summary
Our base-case estimate uses P/Tangible Book × ROE Quality. We then blend that result with the average analyst price target of $23.57 from 29 analysts, using a 25% weight on analyst consensus. That produces an estimated intrinsic value of $22.89 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 (7.3%) is below the minimum investors require (8.9%). This means the bank is worth less than the net assets on its books.
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