AGNC
AGNC Investment Corp.
$10.21
Real Estate Investment Trust
85%
P/FFO × Default REIT Multiple
Strong
·
Conviction
Undervalued
Trading 54.9% below fair value
You pay
$10.21
Bear
$18.70
Fair
$22.64
Bull
$26.58
Bear
$18.70
+83.2%
$1.61 FFO × 18x
Fair
$22.64
+121.7%
$1.61 FFO × 22x
Bull
$26.58
+160.3%
$1.61 FFO × 26x
Key Value Driver
FFO/share ($1.61) × default P/FFO multiple
Implied Market Multiple
6.3x
Summary
Our base-case estimate uses P/FFO × Default REIT Multiple. We then blend that result with the average analyst price target of $11.13 from 35 analysts, using a 30% weight on analyst consensus. That produces an estimated intrinsic value of $22.64 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-based valuation: $8.95 (68% below our primary estimate). Large gaps suggest the dividend may not fully reflect the company's value.
Wall Street's average price target is $11.13 (from 35 analysts). Our estimate is 148% 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