AMH
American Homes 4 Rent
$34.34
Real Estate Investment Trust
85%
P/FFO × Residential REIT Multiple
Moderate
·
Conviction
Undervalued
Trading 39.7% below fair value
You pay
$34.34
Bear
$47.95
Fair
$56.94
Bull
$65.94
Bear
$47.95
+39.6%
$2.67 FFO × 21x
Fair
$56.94
+65.8%
$2.67 FFO × 25x
Bull
$65.94
+92.0%
$2.67 FFO × 29x
Key Value Driver
FFO/share ($2.67) × residential P/FFO multiple
Implied Market Multiple
12.9x
Summary
Our base-case estimate uses P/FFO × Residential REIT Multiple. We then blend that result with the average analyst price target of $36.20 from 36 analysts, using a 30% weight on analyst consensus. That produces an estimated intrinsic value of $56.94 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 $36.20 (from 36 analysts). Our estimate is 82% 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