WFC
Wells Fargo & Company
$87.53
Banks, Insurers & Asset Managers
90%
P/Tangible Book × ROE Quality
Mild
·
Conviction
Fair Value
Trading 8.2% below fair value
You pay
$87.53
Bear
$62.20
Fair
$95.34
Bull
$115.24
Bear
$62.20
-28.9%
ROTCE 10.7% → 1.25x TBV
Fair
$95.34
+8.9%
ROTCE 14.2% → 1.92x TBV
Bull
$115.24
+31.7%
ROTCE 16.4% → 2.32x TBV
Key Value Driver
ROTCE (14.2%) vs. cost of equity (9.3%)
Implied Market Multiple
1.79x
Summary
Our base-case estimate uses P/Tangible Book × ROE Quality. We then blend that result with the average analyst price target of $98.14 from 60 analysts, using a 35% weight on analyst consensus. That produces an estimated intrinsic value of $95.34 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