VLY
Valley National Bancorp
$14.64
Banks, Insurers & Asset Managers
85%
P/Tangible Book × ROE Quality
Mild
·
Conviction
Fair Value
Trading 5.3% below fair value
You pay
$14.64
Bear
$10.83
Fair
$15.47
Bull
$20.11
Bear
$10.83
-26.0%
ROTCE 7.7% → 0.60x TBV
Fair
$15.47
+5.7%
ROTCE 10.2% → 1.02x TBV
Bull
$20.11
+37.4%
ROTCE 11.7% → 1.28x TBV
Key Value Driver
ROTCE (10.2%) vs. cost of equity (10.1%)
Implied Market Multiple
1.38x
Summary
Our base-case estimate uses P/Tangible Book × ROE Quality. We then blend that result with the average analyst price target of $16.42 from 21 analysts, using a 25% weight on analyst consensus. That produces an estimated intrinsic value of $15.47 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.
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