AMBC - Ambac Financial Group, Inc.
Price:
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CONSENSUS:
Buy
DETAILS
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PRICE TARGET:
$14.00
DETAILS
HIGH:
$18.00
LOW:
$10.00
MEDIAN:
$14.00
CONSENSUS:
$14.00
UPSIDE:
68.88%
AlphaVal
Deterministic, archetype-aware fair value
Banks, Insurers & Asset Managers
85% confidence
Primary model: P/Tangible Book × ROE Quality
Adjust Assumptions
-36.6%
9.1%
Key Value Driver
ROTCE (-36.6%) vs. cost of equity (9.1%)
Implied Market Multiple
0.56x
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 $14.00 from 6 analysts, using a 20% weight on analyst consensus. That produces an estimated intrinsic value of $73.07 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.
Return on equity (-36.6%) is below the minimum investors require (9.1%). This means the bank is worth less than the net assets on its books.
Wall Street's average price target is $14.00 (from 6 analysts). Our estimate is 527% 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