ABR
Arbor Realty Trust
$4.91
Real Estate Investment Trust
85%
P/FFO × Default REIT Multiple
Strong
·
Conviction
Undervalued
Trading 71.0% below fair value
You pay
$4.91
Bear
$13.92
Fair
$16.91
Bull
$19.89
Bear
$13.92
+183.5%
$0.89 FFO × 18x
Fair
$16.91
+244.4%
$0.89 FFO × 22x
Bull
$19.89
+305.2%
$0.89 FFO × 26x
Key Value Driver
FFO/share ($0.89) × default P/FFO multiple
Implied Market Multiple
5.5x
Summary
Our base-case estimate uses P/FFO × Default REIT Multiple. We then blend that result with the average analyst price target of $5.50 from 12 analysts, using a 20% weight on analyst consensus. That produces an estimated intrinsic value of $16.91 per share.
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 21.8% is unusually high — make sure the company generates enough cash to keep paying it.
Wall Street's average price target is $5.50 (from 12 analysts). Our estimate is 259% 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