AMH
American Homes 4 Rent
$31.28
Real Estate Investment Trust
85%
P/FFO × Residential REIT Multiple
Strong
·
Conviction
Undervalued
Trading 52.5% below fair value
You pay
$31.28
Bear
$55.44
Fair
$65.83
Bull
$76.23
Bear
$55.44
+77.2%
$2.67 FFO × 21x
Fair
$65.83
+110.5%
$2.67 FFO × 25x
Bull
$76.23
+143.7%
$2.67 FFO × 29x
Adjust Assumptions
24.7x
$
Key Value Driver
FFO/share ($2.67) × residential P/FFO multiple
Implied Market Multiple
11.7x
Analyst Consensus (External Reference)
Never blended into the bear/base/bull estimates above.
Average Target (36 analysts)
$36.32
Divergence from AlphaVal
81%
Summary
At $2.67 FFO/share with a 25x residential REIT multiple, the base-case value is $65.83 per share. Dividend yield: 4.1%.
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 $36.32 (from 36 analysts). Our estimate is 81% 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