WFC
Wells Fargo & Company
$76.40
Banks, Insurers & Asset Managers
90%
P/Tangible Book × ROE Quality
Moderate
·
Conviction
Fair Value
Trading 18.0% below fair value
You pay
$76.40
Bear
$60.79
Fair
$93.19
Bull
$112.64
Bear
$60.79
-20.4%
ROTCE 10.7% → 1.20x TBV
Fair
$93.19
+22.0%
ROTCE 14.2% → 1.84x TBV
Bull
$112.64
+47.4%
ROTCE 16.4% → 2.22x TBV
Key Value Driver
ROTCE (14.2%) vs. cost of equity (9.6%)
Implied Market Multiple
1.56x
Summary
Our base-case estimate uses P/Tangible Book × ROE Quality. We then blend that result with the average analyst price target of $99.38 from 60 analysts, using a 35% weight on analyst consensus. That produces an estimated intrinsic value of $93.19 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