VLY
Valley National Bancorp
$13.92
Banks, Insurers & Asset Managers
85%
P/Tangible Book × ROE Quality
Mild
·
Conviction
Fair Value
Trading 8.1% below fair value
You pay
$13.92
Bear
$10.61
Fair
$15.15
Bull
$19.70
Bear
$10.61
-23.8%
ROTCE 7.7% → 0.60x TBV
Fair
$15.15
+8.8%
ROTCE 10.2% → 1.01x TBV
Bull
$19.70
+41.5%
ROTCE 11.7% → 1.26x TBV
Adjust Assumptions
10.2%
10.1%
Key Value Driver
ROTCE (10.2%) vs. cost of equity (10.1%)
Implied Market Multiple
1.32x
Analyst Consensus (External Reference)
Never blended into the bear/base/bull estimates above.
Average Target (21 analysts)
$16.90
Divergence from AlphaVal
10%
Summary
With ROTCE of 10.2% vs. 10.1% cost of equity, fair P/TBV is 1.01x on $10.57 tangible book, implying $15.15 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