UNTY
Unity Bancorp, Inc.
$54.58
Banks, Insurers & Asset Managers
85%
P/Tangible Book × ROE Quality
Strong
·
Conviction
Undervalued
Trading 50.1% below fair value
You pay
$54.58
Bear
$73.48
Fair
$109.33
Bull
$124.86
Bear
$73.48
+34.6%
ROTCE 12.6% → 2.35x TBV
Fair
$109.33
+100.3%
ROTCE 16.8% → 3.50x TBV
Bull
$124.86
+128.8%
ROTCE 19.4% → 4.00x TBV
Key Value Driver
ROTCE (16.8%) vs. cost of equity (7.7%)
Implied Market Multiple
1.59x
Summary
Our base-case estimate uses P/Tangible Book × ROE Quality. We then blend that result with the average analyst price target of $66.50 from 5 analysts, using a 20% weight on analyst consensus. That produces an estimated intrinsic value of $109.33 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 $66.50 (from 5 analysts). Our estimate is 81% 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