ACGL - Arch Capital Group Ltd.
Price:
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CONSENSUS:
Buy
DETAILS
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PRICE TARGET:
$111.40
DETAILS
HIGH:
$126.00
LOW:
$102.00
MEDIAN:
$105.00
CONSENSUS:
$111.40
UPSIDE:
9.92%
AlphaVal
Deterministic, archetype-aware fair value
Banks, Insurers & Asset Managers
85% confidence
Primary model: P/Tangible Book × ROE Quality
Adjust Assumptions
20.7%
6.0%
Key Value Driver
ROTCE (20.7%) vs. cost of equity (6.0%)
Implied Market Multiple
1.67x
Plain-Language Summary
Our base-case estimate uses P/Tangible Book × ROE Quality. We then blend that result with the average analyst price target of $111.40 from 34 analysts, using a 30% weight on analyst consensus. That produces an estimated intrinsic value of $205.75 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 $111.40 (from 34 analysts). Our estimate is 121% 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