WAFD
WaFd, Inc.
$38.09
Banks, Insurers & Asset Managers
85%
P/Tangible Book × ROE Quality
Mild
·
Conviction
Overvalued
Trading 11.1% above fair value
You pay
$38.09
Bear
$18.43
Fair
$34.28
Bull
$43.80
Bear
$18.43
-51.6%
ROTCE 6.5% → 0.52x TBV
Fair
$34.28
-10.0%
ROTCE 8.7% → 0.97x TBV
Bull
$43.80
+15.0%
ROTCE 10.0% → 1.24x TBV
Key Value Driver
ROTCE (8.7%) vs. cost of equity (8.8%)
Implied Market Multiple
1.08x
Summary
Our base-case estimate uses P/Tangible Book × ROE Quality. We then blend that result with the average analyst price target of $35.00 from 11 analysts, using a 20% weight on analyst consensus. That produces an estimated intrinsic value of $34.28 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.
Return on equity (8.7%) is below the minimum investors require (8.8%). This means the bank is worth less than the net assets on its books.
Dividend-based valuation: $18.41 (46% 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