Mercury General Corporation logo MCY - Mercury General Corporation

Price: -- -- | CONSENSUS: Hold DETAILS
STRONG
BUY 1
BUY 0
HOLD 5
SELL 1
STRONG
SELL 0
| PRICE TARGET: $90.00 DETAILS
HIGH: $90.00
LOW: $90.00
MEDIAN: $90.00
CONSENSUS: $90.00
DOWNSIDE: 10.92%
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 26.3% below fair value
Current Price $101.03
Bear Case $97.74 3.3% downside ($97.74 - $101.03) / $101.03 = -3.3% ROTCE 20.0% → 2.93x TBV
Fair Value $137.15 35.8% upside ($137.15 - $101.03) / $101.03 = 35.8% ROTCE 25.0% → 4.00x TBV
Bull Case $178.30 76.5% upside ($178.30 - $101.03) / $101.03 = 76.5% ROTCE 30.0% → 4.00x TBV

Adjust Assumptions

26.9%
9.5%

Key Value Driver

ROTCE (26.9%) vs. cost of equity (9.5%)

Implied Market Multiple 2.79x

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 $90.00 from 7 analysts, using a 20% weight on analyst consensus. That produces an estimated intrinsic value of $137.15 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 Wall Street's average price target is $90.00 (from 7 analysts). Our estimate is 65% 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