VLY
Valley National Bancorp
$13.55
Banks, Insurers & Asset Managers
85%
P/Tangible Book × ROE Quality
Mild
·
Conviction
Fair Value
Trading 11.2% below fair value
You pay
$13.55
Bear
$10.69
Fair
$15.26
Bull
$19.84
Bear
$10.69
-21.1%
ROTCE 7.7% → 0.59x TBV
Fair
$15.26
+12.6%
ROTCE 10.2% → 1.01x TBV
Bull
$19.84
+46.4%
ROTCE 11.7% → 1.26x TBV
Key Value Driver
ROTCE (10.2%) vs. cost of equity (10.2%)
Implied Market Multiple
1.28x
Summary
Our base-case estimate uses P/Tangible Book × ROE Quality. We then blend that result with the average analyst price target of $15.58 from 21 analysts, using a 25% weight on analyst consensus. That produces an estimated intrinsic value of $15.26 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