XP
XP Inc.
$30.41
Banks, Insurers & Asset Managers
90%
P/Tangible Book × ROE Quality
Moderate
·
Conviction
Fair Value
Trading 18.4% below fair value
You pay
$30.41
Bear
$26.08
Fair
$37.26
Bull
$48.44
Bear
$26.08
-14.2%
ROTCE 18.3% → 2.39x TBV
Fair
$37.26
+22.5%
ROTCE 24.4% → 3.41x TBV
Bull
$48.44
+59.3%
ROTCE 28.0% → 4.00x TBV
Adjust Assumptions
24.4%
10.0%
Key Value Driver
ROTCE (24.4%) vs. cost of equity (10.0%)
Implied Market Multiple
3.79x
Analyst Consensus (External Reference)
Never blended into the bear/base/bull estimates above.
Average Target (10 analysts)
$37.00
Divergence from AlphaVal
1%
Summary
With ROTCE of 24.4% vs. 10.0% cost of equity, fair P/TBV is 3.41x on $8.03 tangible book, implying $37.26 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.
Financial statements were converted from BRL into USD using USDBRL at 0.2001 USD per BRL.
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