USB
U.S. Bancorp
$59.42
Banks, Insurers & Asset Managers
85%
P/Tangible Book × ROE Quality
Mild
·
Conviction
Fair Value
Trading 3.6% below fair value
You pay
$59.42
Bear
$41.04
Fair
$61.63
Bull
$73.98
Bear
$41.04
-30.9%
ROTCE 11.9% → 1.34x TBV
Fair
$61.63
+3.7%
ROTCE 15.9% → 2.02x TBV
Bull
$73.98
+24.5%
ROTCE 18.3% → 2.42x TBV
Adjust Assumptions
15.9%
9.9%
Key Value Driver
ROTCE (15.9%) vs. cost of equity (9.9%)
Implied Market Multiple
1.94x
Analyst Consensus (External Reference)
Never blended into the bear/base/bull estimates above.
Average Target (49 analysts)
$69.53
Divergence from AlphaVal
11%
Summary
With ROTCE of 15.9% vs. 9.9% cost of equity, fair P/TBV is 2.02x on $30.59 tangible book, implying $61.63 per share. DDM cross-check: $28.89.
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: $28.89 (53% 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