ALEX
Alexander & Baldwin, Inc.
$20.84
Real Estate Investment Trust
85%
P/FFO × Retail REIT Multiple
Moderate
·
Conviction
Fair Value
Trading 20.7% below fair value
You pay
$20.84
Bear
$21.03
Fair
$26.29
Bull
$31.56
Bear
$21.03
+0.9%
$1.41 FFO × 16x
Fair
$26.29
+26.2%
$1.41 FFO × 20x
Bull
$31.56
+51.4%
$1.41 FFO × 23x
Key Value Driver
FFO/share ($1.41) × retail P/FFO multiple
Implied Market Multiple
14.7x
Summary
Our base-case estimate uses P/FFO × Retail REIT Multiple. We then blend that result with the average analyst price target of $21.21 from 8 analysts, using a 20% weight on analyst consensus. That produces an estimated intrinsic value of $26.29 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.
Wall Street's average price target is $21.21 (from 8 analysts). Our estimate is 30% 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