Heritage Financial Corporation logo HFWA - Heritage Financial Corporation

Price: -- -- | CONSENSUS: Buy DETAILS
STRONG
BUY 0
BUY 7
HOLD 7
SELL 0
STRONG
SELL 0
| PRICE TARGET: $31.33 DETAILS
HIGH: $32.00
LOW: $30.00
MEDIAN: $32.00
CONSENSUS: $31.33
UPSIDE: 15.27%
AlphaVal

AlphaVal

Deterministic, archetype-aware fair value

Banks, Insurers & Asset Managers 85% confidence

Primary model: P/Tangible Book × ROE Quality

Valuation Signal Undervalued Moderate
Trading 27.2% below fair value
Current Price $27.18
Bear Case $21.72 20.1% downside ($21.72 - $27.18) / $27.18 = -20.1% ROTCE 7.5% → 1.13x TBV
Fair Value $37.31 37.3% upside ($37.31 - $27.18) / $27.18 = 37.3% ROTCE 10.0% → 1.94x TBV
Bull Case $46.67 71.7% upside ($46.67 - $27.18) / $27.18 = 71.7% ROTCE 11.4% → 2.43x TBV

Adjust Assumptions

10.0%
7.1%

Key Value Driver

ROTCE (10.0%) vs. cost of equity (7.1%)

Implied Market Multiple 1.36x

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 $31.33 from 14 analysts, using a 20% weight on analyst consensus. That produces an estimated intrinsic value of $37.31 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.
ℹ Dividend-based valuation: $24.06 (38% 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