USB
U.S. Bancorp
$62.84
Banks, Insurers & Asset Managers
85%
P/Tangible Book × ROE Quality
Mild
·
Conviction
Fair Value
Trading 2.6% below fair value
You pay
$62.84
Bear
$42.97
Fair
$64.53
Bull
$77.46
Bear
$42.97
-31.6%
ROTCE 11.9% → 1.40x TBV
Fair
$64.53
+2.7%
ROTCE 15.9% → 2.11x TBV
Bull
$77.46
+23.3%
ROTCE 18.3% → 2.53x TBV
Adjust Assumptions
15.9%
9.6%
Key Value Driver
ROTCE (15.9%) vs. cost of equity (9.6%)
Implied Market Multiple
2.05x
Analyst Consensus (External Reference)
Never blended into the bear/base/bull estimates above.
Average Target (49 analysts)
$69.80
Divergence from AlphaVal
8%
Summary
With ROTCE of 15.9% vs. 9.6% cost of equity, fair P/TBV is 2.11x on $30.59 tangible book, implying $64.53 per share. DDM cross-check: $29.95.
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: $29.95 (54% 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