Analyst Note
| Michael Wong, CFA, CPA |We are increasing our fair value estimate for narrow-moat Ameriprise Financial to $236 from $208 per share, which implies around a 12.5 times P/E multiple of 2022 projected earnings and about 5 times tangible book value. Of the $28 increase in our fair value estimate, approximately $8 is from earnings since our previous valuation update, $24 is from higher client assets driven by inflows and recent market appreciation, and $11 is from increasing our assumed returns on capital in the later years of our valuation model. Offsetting this was a $14 reduction from increasing the tax rate that we use in our model, as we assume the United States will increase the corporate tax rate, and $1 of miscellaneous adjustments.