Arrow Financial Corporation logo AROW - Arrow Financial Corporation

Price: -- -- | CONSENSUS: Hold DETAILS
STRONG
BUY 0
BUY 0
HOLD 1
SELL 0
STRONG
SELL 0
| PRICE TARGET: $43.00 DETAILS
HIGH: $43.00
LOW: $43.00
MEDIAN: $43.00
CONSENSUS: $43.00
UPSIDE: 5.39%
AlphaVal

AlphaVal

Deterministic, archetype-aware fair value

Banks, Insurers & Asset Managers 85% confidence

Primary model: P/Tangible Book × ROE Quality

Valuation Signal Overvalued Mild
Trading 2.6% above fair value
Current Price $40.80
Bear Case $27.82 31.8% downside ($27.82 - $40.80) / $40.80 = -31.8% ROTCE 8.1% → 0.94x TBV
Fair Value $39.75 2.6% downside ($39.75 - $40.80) / $40.80 = -2.6% ROTCE 10.8% → 1.56x TBV
Bull Case $51.68 26.7% upside ($51.68 - $40.80) / $40.80 = 26.7% ROTCE 12.4% → 1.93x TBV

Adjust Assumptions

10.8%
8.4%

Key Value Driver

ROTCE (10.8%) vs. cost of equity (8.4%)

Implied Market Multiple 1.66x

Plain-Language Summary

With ROTCE of 10.8% vs. 8.4% cost of equity, fair P/TBV is 1.56x on $24.58 tangible book, implying $39.75 per share. DDM cross-check: $19.42.

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.
ℹ Dividend-based valuation: $19.42 (51% below our primary estimate). Large gaps suggest the dividend may not fully reflect the company's value.

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