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: 6.49%
AlphaVal

AlphaVal

Deterministic, archetype-aware fair value

Banks, Insurers & Asset Managers 85% confidence

Primary model: P/Tangible Book × ROE Quality

Valuation Signal Fair Value Moderate
Trading 22.6% below fair value
Current Price $29.42
Bear Case $22.11 24.8% downside ($22.11 - $29.42) / $29.42 = -24.8% ROTCE 7.5% → 1.16x TBV
Fair Value $38.00 29.2% upside ($38.00 - $29.42) / $29.42 = 29.2% ROTCE 10.0% → 1.99x TBV
Bull Case $47.52 61.5% upside ($47.52 - $29.42) / $29.42 = 61.5% ROTCE 11.4% → 2.49x TBV

Adjust Assumptions

10.0%
7.0%

Key Value Driver

ROTCE (10.0%) vs. cost of equity (7.0%)

Implied Market Multiple 1.47x

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 $38.00 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: $24.45 (38% below our primary estimate). Large gaps suggest the dividend may not fully reflect the company's value.
ℹ Wall Street's average price target is $31.33 (from 14 analysts). Our estimate is 27% 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