WU
The Western Union Company
$8.37
Banks, Insurers & Asset Managers
80%
P/Tangible Book × ROE Quality
Strong
·
Conviction
Undervalued
Trading 70.6% below fair value
You pay
$8.37
Bear
$19.95
Fair
$28.50
Bull
$37.05
Bear
$19.95
+138.3%
ROTCE 20.0% → 4.00x TBV
Fair
$28.50
+240.5%
ROTCE 25.0% → 4.00x TBV
Bull
$37.05
+342.7%
ROTCE 30.0% → 4.00x TBV
Key Value Driver
ROTCE (52.2%) vs. cost of equity (7.2%)
Implied Market Multiple
2.73x
Summary
Our base-case estimate uses P/Tangible Book × ROE Quality. We then blend that result with the average analyst price target of $9.00 from 48 analysts, using a 30% weight on analyst consensus. That produces an estimated intrinsic value of $28.50 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 $9.00 (from 48 analysts). Our estimate is 310% 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