ADC
Agree Realty Corporation
$75.46
Real Estate Investment Trust
85%
P/FFO × Retail REIT Multiple
Mild
·
Conviction
Overvalued
Trading 13.4% above fair value
You pay
$75.46
Bear
$53.49
Fair
$66.55
Bull
$79.60
Bear
$53.49
-29.1%
$4.00 FFO × 16x
Fair
$66.55
-11.8%
$4.00 FFO × 20x
Bull
$79.60
+5.5%
$4.00 FFO × 23x
Key Value Driver
FFO/share ($4.00) × retail P/FFO multiple
Implied Market Multiple
18.9x
Summary
Our base-case estimate uses P/FFO × Retail REIT Multiple. We then blend that result with the average analyst price target of $83.83 from 32 analysts, using a 30% weight on analyst consensus. That produces an estimated intrinsic value of $66.55 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.
The 1.4% yield is low for a real estate company — investors are paying up because they expect above-average growth.
Dividend-based valuation: $15.27 (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 $83.83 (from 32 analysts). Our estimate is 29% 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