WRB
W. R. Berkley Corporation
$68.12
Banks, Insurers & Asset Managers
85%
P/Tangible Book × ROE Quality
Moderate
·
Conviction
Undervalued
Trading 25.6% below fair value
Bear
$91.50
+34.3%
ROTCE 15.7% → 4.00x TBV
Fair
$91.50
+34.3%
ROTCE 20.9% → 4.00x TBV
Bull
$91.50
+34.3%
ROTCE 24.0% → 4.00x TBV
Adjust Assumptions
20.9%
6.0%
Key Value Driver
ROTCE (20.9%) vs. cost of equity (6.0%)
Implied Market Multiple
2.98x
Analyst Consensus (External Reference)
Never blended into the bear/base/bull estimates above.
Average Target (30 analysts)
$69.44
Divergence from AlphaVal
32%
Summary
With ROTCE of 20.9% vs. 6.0% cost of equity, fair P/TBV is 4.00x on $22.87 tangible book, implying $91.50 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 $69.44 (from 30 analysts). Our estimate is 32% 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