ADC
Agree Realty Corporation
$65.41
Real Estate Investment Trust
85%
P/FFO × Retail REIT Multiple
Mild
·
Conviction
Overvalued
Trading 10.5% above fair value
You pay
$65.41
Bear
$47.58
Fair
$59.18
Bull
$70.79
Bear
$47.58
-27.3%
$4.00 FFO × 16x
Fair
$59.18
-9.5%
$4.00 FFO × 20x
Bull
$70.79
+8.2%
$4.00 FFO × 23x
Adjust Assumptions
19.5x
$
Key Value Driver
FFO/share ($4.00) × retail P/FFO multiple
Implied Market Multiple
16.4x
Analyst Consensus (External Reference)
Never blended into the bear/base/bull estimates above.
Average Target (32 analysts)
$81.00
Divergence from AlphaVal
27%
Summary
At $4.00 FFO/share with a 20x retail REIT multiple, the base-case value is $59.18 per share. Dividend yield: 1.6%. DDM cross-check: $15.41.
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.
The 1.6% yield is low for a real estate company — investors are paying up because they expect above-average growth.
Dividend-based valuation: $15.41 (74% below our primary estimate). Large gaps suggest the dividend may not fully reflect the company's value.
Wall Street's average price target is $81.00 (from 32 analysts). Our estimate is 27% below 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