USB
U.S. Bancorp
$54.83
Banks, Insurers & Asset Managers
85%
P/Tangible Book × ROE Quality
Mild
·
Conviction
Fair Value
Trading 12.4% below fair value
You pay
$54.83
Bear
$41.67
Fair
$62.57
Bull
$75.11
Bear
$41.67
-24.0%
ROTCE 11.9% → 1.35x TBV
Fair
$62.57
+14.1%
ROTCE 15.9% → 2.02x TBV
Bull
$75.11
+37.0%
ROTCE 18.3% → 2.43x TBV
Key Value Driver
ROTCE (15.9%) vs. cost of equity (9.9%)
Implied Market Multiple
1.79x
Summary
Our base-case estimate uses P/Tangible Book × ROE Quality. We then blend that result with the average analyst price target of $63.82 from 49 analysts, using a 30% weight on analyst consensus. That produces an estimated intrinsic value of $62.57 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.
Dividend-based valuation: $29.59 (52% below our primary estimate). Large gaps suggest the dividend may not fully reflect the company's value.
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