WRB
W. R. Berkley Corporation
$71.67
Banks, Insurers & Asset Managers
85%
P/Tangible Book × ROE Quality
Moderate
·
Conviction
Fair Value
Trading 15.6% below fair value
Bear
$84.96
+18.5%
ROTCE 15.7% → 4.00x TBV
Fair
$84.96
+18.5%
ROTCE 20.9% → 4.00x TBV
Bull
$84.96
+18.5%
ROTCE 24.0% → 4.00x TBV
Key Value Driver
ROTCE (20.9%) vs. cost of equity (6.0%)
Implied Market Multiple
3.13x
Summary
Our base-case estimate uses P/Tangible Book × ROE Quality. We then blend that result with the average analyst price target of $69.70 from 30 analysts, using a 30% weight on analyst consensus. That produces an estimated intrinsic value of $84.96 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.
Wall Street's average price target is $69.70 (from 30 analysts). Our estimate is 31% 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