WTW
Willis Towers Watson Public Limited Company
$325.34
Banks, Insurers & Asset Managers
85%
P/Tangible Book × ROE Quality
Mild
·
Conviction
Fair Value
Trading 5.3% below fair value
Bear
$343.53
+5.6%
ROTCE 15.1% → 4.00x TBV
Fair
$343.53
+5.6%
ROTCE 20.1% → 4.00x TBV
Bull
$343.53
+5.6%
ROTCE 23.1% → 4.00x TBV
Adjust Assumptions
20.1%
6.6%
Key Value Driver
ROTCE (20.1%) vs. cost of equity (6.6%)
Implied Market Multiple
3.79x
Analyst Consensus (External Reference)
Never blended into the bear/base/bull estimates above.
Average Target (29 analysts)
$356.64
Divergence from AlphaVal
4%
Summary
With ROTCE of 20.1% vs. 6.6% cost of equity, fair P/TBV is 4.00x on $85.88 tangible book, implying $343.53 per share. DDM cross-check: $112.58.
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.
Dividend-based valuation: $112.58 (67% below our primary estimate). Large gaps suggest the dividend may not fully reflect the company's value.
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