WFC
Wells Fargo & Company
$82.23
Banks, Insurers & Asset Managers
90%
P/Tangible Book × ROE Quality
Mild
·
Conviction
Fair Value
Trading 10.3% below fair value
You pay
$82.23
Bear
$59.80
Fair
$91.66
Bull
$110.78
Bear
$59.80
-27.3%
ROTCE 10.7% → 1.21x TBV
Fair
$91.66
+11.5%
ROTCE 14.2% → 1.85x TBV
Bull
$110.78
+34.7%
ROTCE 16.4% → 2.24x TBV
Adjust Assumptions
14.2%
9.5%
Key Value Driver
ROTCE (14.2%) vs. cost of equity (9.5%)
Implied Market Multiple
1.66x
Analyst Consensus (External Reference)
Never blended into the bear/base/bull estimates above.
Average Target (60 analysts)
$97.14
Divergence from AlphaVal
6%
Summary
With ROTCE of 14.2% vs. 9.5% cost of equity, fair P/TBV is 1.85x on $49.54 tangible book, implying $91.66 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