AHH
AH Realty Trust, Inc.
$6.76
Real Estate Investment Trust
85%
P/FFO × Diversified REIT Multiple
Strong
·
Conviction
Undervalued
Trading 56.9% below fair value
You pay
$6.76
Bear
$13.00
Fair
$15.69
Bull
$18.39
Bear
$13.00
+92.3%
$1.21 FFO × 14x
Fair
$15.69
+132.1%
$1.21 FFO × 17x
Bull
$18.39
+172.0%
$1.21 FFO × 20x
Key Value Driver
FFO/share ($1.21) × diversified P/FFO multiple
Implied Market Multiple
5.6x
Summary
Our base-case estimate uses P/FFO × Diversified REIT Multiple. We then blend that result with the average analyst price target of $8.25 from 14 analysts, using a 20% weight on analyst consensus. That produces an estimated intrinsic value of $15.69 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 8.3% is unusually high — make sure the company generates enough cash to keep paying it.
Dividend-based valuation: $10.44 (41% below our primary estimate). Large gaps suggest the dividend may not fully reflect the company's value.
Wall Street's average price target is $8.25 (from 14 analysts). Our estimate is 113% 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