Merchants Bancorp logo MBIN - Merchants Bancorp

Price: -- -- | CONSENSUS: Buy DETAILS
STRONG
BUY 0
BUY 4
HOLD 3
SELL 0
STRONG
SELL 0
| PRICE TARGET: $52.67 DETAILS
HIGH: $58.00
LOW: $49.00
MEDIAN: $51.00
CONSENSUS: $52.67
UPSIDE: 8.42%
AlphaVal

AlphaVal

Deterministic, archetype-aware fair value

Banks, Insurers & Asset Managers 90% confidence

Primary model: P/Tangible Book × ROE Quality

Valuation Signal Fair Value Mild
Trading 7.3% below fair value
Current Price $48.58
Bear Case $36.69 24.5% downside ($36.69 - $48.58) / $48.58 = -24.5% ROTCE 7.2% → 0.49x TBV
Fair Value $52.42 7.9% upside ($52.42 - $48.58) / $48.58 = 7.9% ROTCE 9.6% → 0.85x TBV
Bull Case $68.15 40.3% upside ($68.15 - $48.58) / $48.58 = 40.3% ROTCE 11.1% → 1.07x TBV

Adjust Assumptions

9.6%
10.6%

Key Value Driver

ROTCE (9.6%) vs. cost of equity (10.6%)

Implied Market Multiple 0.98x

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 $52.67 from 7 analysts, using a 20% weight on analyst consensus. That produces an estimated intrinsic value of $52.42 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 (9.6%) is below the minimum investors require (10.6%). This means the bank is worth less than the net assets on its books.
ℹ Dividend-based valuation: $8.84 (83% 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