APLE
Apple Hospitality REIT, Inc.
$16.32
Real Estate Investment Trust
85%
P/FFO × Default REIT Multiple
Moderate
·
Conviction
Undervalued
Trading 37.0% below fair value
You pay
$16.32
Bear
$21.38
Fair
$25.90
Bull
$30.43
Bear
$21.38
+31.0%
$1.56 FFO × 18x
Fair
$25.90
+58.8%
$1.56 FFO × 22x
Bull
$30.43
+86.5%
$1.56 FFO × 26x
Adjust Assumptions
22.1x
$
Key Value Driver
FFO/share ($1.56) × default P/FFO multiple
Implied Market Multiple
10.5x
Analyst Consensus (External Reference)
Never blended into the bear/base/bull estimates above.
Average Target (18 analysts)
$17.10
Divergence from AlphaVal
51%
Summary
At $1.56 FFO/share with a 22x default REIT multiple, the base-case value is $25.90 per share. Dividend yield: 2.0%. DDM cross-check: $5.96.
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: $5.96 (77% below our primary estimate). Large gaps suggest the dividend may not fully reflect the company's value.
Wall Street's average price target is $17.10 (from 18 analysts). Our estimate is 51% 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