UVSP
Univest Financial Corporation
$40.90
Banks, Insurers & Asset Managers
85%
P/Tangible Book × ROE Quality
Moderate
·
Conviction
Undervalued
Trading 26.0% below fair value
You pay
$40.90
Bear
$34.49
Fair
$55.28
Bull
$67.75
Bear
$34.49
-15.7%
ROTCE 9.0% → 1.25x TBV
Fair
$55.28
+35.2%
ROTCE 11.9% → 2.00x TBV
Bull
$67.75
+65.7%
ROTCE 13.7% → 2.46x TBV
Adjust Assumptions
11.9%
8.0%
Key Value Driver
ROTCE (11.9%) vs. cost of equity (8.0%)
Implied Market Multiple
1.48x
Analyst Consensus (External Reference)
Never blended into the bear/base/bull estimates above.
Average Target (6 analysts)
$32.50
Divergence from AlphaVal
70%
Summary
With ROTCE of 11.9% vs. 8.0% cost of equity, fair P/TBV is 2.00x on $27.57 tangible book, implying $55.28 per share. DDM cross-check: $15.09.
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: $15.09 (73% below our primary estimate). Large gaps suggest the dividend may not fully reflect the company's value.
Wall Street's average price target is $32.50 (from 6 analysts). Our estimate is 70% 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