WU
The Western Union Company
$8.22
Banks, Insurers & Asset Managers
80%
P/Tangible Book × ROE Quality
Strong
·
Conviction
Undervalued
Trading 70.7% below fair value
You pay
$8.22
Bear
$19.63
Fair
$28.05
Bull
$36.47
Bear
$19.63
+138.7%
ROTCE 20.0% → 4.00x TBV
Fair
$28.05
+241.1%
ROTCE 25.0% → 4.00x TBV
Bull
$36.47
+343.4%
ROTCE 30.0% → 4.00x TBV
Key Value Driver
ROTCE (52.2%) vs. cost of equity (7.0%)
Implied Market Multiple
2.68x
Summary
Our base-case estimate uses P/Tangible Book × ROE Quality. We then blend that result with the average analyst price target of $7.50 from 49 analysts, using a 30% weight on analyst consensus. That produces an estimated intrinsic value of $28.05 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 $7.50 (from 49 analysts). Our estimate is 391% 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