PFSI - PennyMac Financial Services, Inc.
Price:
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CONSENSUS:
Buy
DETAILS
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PRICE TARGET:
$89.80
DETAILS
HIGH:
$110.00
LOW:
$78.00
MEDIAN:
$86.00
CONSENSUS:
$89.80
UPSIDE:
16.59%
AlphaVal
Deterministic, archetype-aware fair value
Banks, Insurers & Asset Managers
90% confidence
Primary model: P/Tangible Book × ROE Quality
Adjust Assumptions
11.6%
12.2%
Key Value Driver
ROTCE (11.6%) vs. cost of equity (12.2%)
Implied Market Multiple
0.93x
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 $89.80 from 21 analysts, using a 25% weight on analyst consensus. That produces an estimated intrinsic value of $120.10 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 (11.6%) is below the minimum investors require (12.2%). This means the bank is worth less than the net assets on its books.
Dividend-based valuation: $34.85 (73% below our primary estimate). Large gaps suggest the dividend may not fully reflect the company's value.
Wall Street's average price target is $89.80 (from 21 analysts). Our estimate is 45% 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