AHR
American Healthcare REIT, Inc.
$50.19
Real Estate Investment Trust
85%
P/FFO × Healthcare REIT Multiple
Strong
·
Conviction
Overvalued
Trading 50.1% above fair value
You pay
$50.19
Bear
$26.50
Fair
$33.44
Bull
$40.37
Bear
$26.50
-47.2%
$1.34 FFO × 18x
Fair
$33.44
-33.4%
$1.34 FFO × 23x
Bull
$40.37
-19.6%
$1.34 FFO × 29x
Key Value Driver
FFO/share ($1.34) × healthcare P/FFO multiple
Implied Market Multiple
37.6x
Summary
Our base-case estimate uses P/FFO × Healthcare REIT Multiple. We then blend that result with the average analyst price target of $57.33 from 11 analysts, using a 20% weight on analyst consensus. That produces an estimated intrinsic value of $33.44 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 2.0% yield is low for a real estate company — investors are paying up because they expect above-average growth.
Dividend-based valuation: $18.64 (32% below our primary estimate). Large gaps suggest the dividend may not fully reflect the company's value.
Wall Street's average price target is $57.33 (from 11 analysts). Our estimate is 52% 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