MORN - Morningstar, Inc.
Price:
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CONSENSUS:
Hold
DETAILS
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PRICE TARGET:
$227.33
DETAILS
HIGH:
$260.00
LOW:
$210.00
MEDIAN:
$212.00
CONSENSUS:
$227.33
UPSIDE:
31.80%
AlphaVal
Deterministic, archetype-aware fair value
Banks, Insurers & Asset Managers
80% confidence
Primary model: P/Tangible Book × ROE Quality
Adjust Assumptions
30.6%
9.8%
Key Value Driver
ROTCE (30.6%) vs. cost of equity (9.8%)
Implied Market Multiple
5.37x
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 $227.33 from 6 analysts, using a 20% weight on analyst consensus. That produces an estimated intrinsic value of $148.29 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.
Dividend-based valuation: $70.08 (45% below our primary estimate). Large gaps suggest the dividend may not fully reflect the company's value.
Wall Street's average price target is $227.33 (from 6 analysts). Our estimate is 43% below 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