ABR
Arbor Realty Trust
$2.81
Real Estate Investment Trust
85%
P/FFO × Default REIT Multiple
Strong
·
Conviction
Undervalued
Trading 85.8% below fair value
You pay
$2.81
Bear
$16.27
Fair
$19.76
Bull
$23.25
Bear
$16.27
+479.2%
$0.89 FFO × 18x
Fair
$19.76
+603.3%
$0.89 FFO × 22x
Bull
$23.25
+727.4%
$0.89 FFO × 26x
Adjust Assumptions
22.1x
$
Key Value Driver
FFO/share ($0.89) × default P/FFO multiple
Implied Market Multiple
3.1x
Analyst Consensus (External Reference)
Never blended into the bear/base/bull estimates above.
Average Target (12 analysts)
$3.50
Divergence from AlphaVal
465%
Summary
At $0.89 FFO/share with a 22x default REIT multiple, the base-case value is $19.76 per share. Dividend yield: 33.5%. DDM cross-check: $17.52.
Warnings
Standard profit figures are misleading for real estate companies — large non-cash accounting charges make profits look artificially low. Dividend yield and funds from operations are better measures.
Dividend yield of 33.5% is unusually high — make sure the company generates enough cash to keep paying it.
Wall Street's average price target is $3.50 (from 12 analysts). Our estimate is 465% above the consensus -- consider that gap carefully.
Key Risks
- P/E and EV/EBITDA are structurally wrong for REITs — use P/FFO and NAV
- Interest rate sensitivity: REIT multiples compress when rates rise
- FFO approximation (NI + D&A) may include gains on property sales — verify