WAFD
WaFd, Inc.
$29.47
Banks, Insurers & Asset Managers
85%
P/Tangible Book × ROE Quality
Moderate
·
Conviction
Undervalued
Trading 38.8% below fair value
You pay
$29.47
Bear
$33.70
Fair
$48.15
Bull
$62.59
Bear
$33.70
+14.4%
ROTCE 7.5% → 0.68x TBV
Fair
$48.15
+63.4%
ROTCE 10.0% → 1.17x TBV
Bull
$62.59
+112.4%
ROTCE 11.5% → 1.46x TBV
Adjust Assumptions
10.0%
9.1%
Key Value Driver
ROTCE (10.0%) vs. cost of equity (9.1%)
Implied Market Multiple
0.85x
Analyst Consensus (External Reference)
Never blended into the bear/base/bull estimates above.
Average Target (11 analysts)
$31.50
Divergence from AlphaVal
53%
Summary
With ROTCE of 10.0% vs. 9.1% cost of equity, fair P/TBV is 1.17x on $34.57 tangible book, implying $48.15 per share. DDM cross-check: $16.97.
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: $16.97 (65% below our primary estimate). Large gaps suggest the dividend may not fully reflect the company's value.
Wall Street's average price target is $31.50 (from 11 analysts). Our estimate is 53% 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