ZION
Zions Bancorporation, National Association
$62.49
Banks, Insurers & Asset Managers
85%
P/Tangible Book × ROE Quality
Moderate
·
Conviction
Undervalued
Trading 36.5% below fair value
You pay
$62.49
Bear
$68.90
Fair
$98.43
Bull
$127.96
Bear
$68.90
+10.3%
ROTCE 11.1% → 1.45x TBV
Fair
$98.43
+57.5%
ROTCE 14.8% → 2.21x TBV
Bull
$127.96
+104.8%
ROTCE 17.0% → 2.66x TBV
Adjust Assumptions
14.8%
8.9%
Key Value Driver
ROTCE (14.8%) vs. cost of equity (8.9%)
Implied Market Multiple
1.5x
Analyst Consensus (External Reference)
Never blended into the bear/base/bull estimates above.
Average Target (51 analysts)
$75.67
Divergence from AlphaVal
30%
Summary
With ROTCE of 14.8% vs. 8.9% cost of equity, fair P/TBV is 2.21x on $41.72 tangible book, implying $98.43 per share. DDM cross-check: $34.44.
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: $34.44 (65% below our primary estimate). Large gaps suggest the dividend may not fully reflect the company's value.
Wall Street's average price target is $75.67 (from 51 analysts). Our estimate is 30% 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