WFC
Wells Fargo & Company
$89.96
Banks, Insurers & Asset Managers
90%
P/Tangible Book × ROE Quality
Mild
·
Conviction
Fair Value
Trading 5.4% below fair value
You pay
$89.96
Bear
$62.02
Fair
$95.06
Bull
$114.89
Bear
$62.02
-31.1%
ROTCE 10.7% → 1.25x TBV
Fair
$95.06
+5.7%
ROTCE 14.2% → 1.92x TBV
Bull
$114.89
+27.7%
ROTCE 16.4% → 2.32x TBV
Adjust Assumptions
14.2%
9.3%
Key Value Driver
ROTCE (14.2%) vs. cost of equity (9.3%)
Implied Market Multiple
1.82x
Analyst Consensus (External Reference)
Never blended into the bear/base/bull estimates above.
Average Target (60 analysts)
$98.14
Divergence from AlphaVal
3%
Summary
With ROTCE of 14.2% vs. 9.3% cost of equity, fair P/TBV is 1.92x on $49.54 tangible book, implying $95.06 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