Stellar Bancorp, Inc. logo STEL - Stellar Bancorp, Inc.

Price: -- -- | CONSENSUS: Buy DETAILS
STRONG
BUY 0
BUY 2
HOLD 2
SELL 0
STRONG
SELL 0
| PRICE TARGET: $29.50 DETAILS
HIGH: $32.00
LOW: $27.00
MEDIAN: $29.50
CONSENSUS: $29.50
DOWNSIDE: 21.27%
AlphaVal

AlphaVal

Deterministic, archetype-aware fair value

Banks, Insurers & Asset Managers 85% confidence

Primary model: P/Tangible Book × ROE Quality

Valuation Signal Overvalued Moderate
Trading 39.7% above fair value
Current Price $37.47
Bear Case $15.10 59.7% downside ($15.10 - $37.47) / $37.47 = -59.7% ROTCE 7.0% → 0.70x TBV
Fair Value $26.82 28.4% downside ($26.82 - $37.47) / $37.47 = -28.4% ROTCE 9.3% → 1.24x TBV
Bull Case $33.85 9.7% downside ($33.85 - $37.47) / $37.47 = -9.7% ROTCE 10.8% → 1.57x TBV

Adjust Assumptions

9.3%
8.3%

Key Value Driver

ROTCE (9.3%) vs. cost of equity (8.3%)

Implied Market Multiple 1.73x

Plain-Language Summary

With ROTCE of 9.3% vs. 8.3% cost of equity, fair P/TBV is 1.24x on $21.61 tangible book, implying $26.82 per share. DDM cross-check: $10.52.

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: $10.52 (61% 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